Sirius Soars on Deal Chatter
Shares in the companies rose more than 6% after analysts at Cowen & Co. said they expect the deal to close next month. Also Wednesday, RealMoney.com's Jim Cramer said Sirius stock could hit $6 if the deal closes this year, as he expects -- but could fall to $2.50 if it doesn't.
Both XM and Sirius have seen their shares swoon since they announced their all-stock tie-up in February. Wall Street has been skeptical that regulators would approve the deal, given that the two are the only players in the satellite radio market. But the companies have argued that they compete in a much bigger media universe that includes free radio and recorded music played on Apple's (AAPL) iPod devices, among others.
In a note to clients Wednesday, Cowen analyst Tom Watts writes that the outlook on the merger is the "best ever." Watts goes on to predict that the deal gets approved next month.Cramer backed up his bullish stance by saying a chat with Sirius CEO Mel Karmazin showed the executive is optimistic that all the issues that could derail the deal have been resolved. The news comes ahead of next Monday's scheduled appearance by Karmazin at the Merrill Lynch Global Investor Media Conference in California. On Wednesday, XM rose $1.10 to $14.72, and Sirius rose 21 cents to $3.52.
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