Stifel Nicolaus Analyst Says XM (XMSR) Has Merger on Their Mind
In a note to clients yesterday afternoon, Stifel Nicolaus analysts Kit Spring commented on XM Satellite Radio (Nasdaq: XMSR) after meeting with the CEO, two IR officers and several marketing managers. The firm said they believe XM is "indeed contemplating a merger w/ Sirius (Nasdaq: SIRI), perhaps due to widespread speculation that, given the synergies (we estimate a present value of $7B), it makes too much sense for Sirius not to try it."
Spring also said, "We believe a 50/50 enterprise value split or perhaps a slight premium to XM shareholders may be warranted in a merger scenario." He said the company's main reservation would be the potential disruption in the retail marketplace if consumers perceive XM as a company that is about to be taken over.
The firm maintains its Buy rating and $18 price target on XM.