Hopeful of Merger With Rival Sirius, A Director Bets Big [WSJ]
By NICOLAS BRULLIARD
August 29, 2007; Page C4
An XM Satellite Radio Holdings Inc. director made the largest insider purchase ever at the company amid optimism that legal rulings in favor of another merger could help clear the path for XM's proposed combination with Sirius Satellite Radio Inc.
XM director Jeffrey Zients, who has served on the company's board since May 2006, reported Friday buying more than $3 million of the company's shares -- the largest reported purchase by an XM insider since the company went public in 1999.
The purchase came as the Federal Trade Commission's effort to halt the merger of Whole Foods Market Inc. and Wild Oats Markets Inc. unraveled in court. Whole Foods completed the buyout yesterday.
As with Whole Foods and Wild Oats, the antitrust argument against XM-Sirius involves the legal definition of the market in which the deal is taking place. In the Whole Foods case, the companies argued successfully that they share a niche with all supermarkets, while the FTC opposed the merger, saying that the combined grocers would have too much dominance among "premium and natural organic food markets."
Federal regulators haven't taken a stand on the XM-Sirius merger, but opponents of the deal have argued the combined companies would dominate satellite radio. Sirius and XM argue that they face competition from terrestrial, high-definition and Internet-based radio stations, as well as digital music players.
When a federal court ruled in favor of Whole Foods, shares of XM jumped, and when an appellate court refused to delay that decision, XM shares rose again. Mr. Zients bought his shares between the two decisions, paying $11.14 a share for 270,000 XM shares last Wednesday, according to Securities and Exchange Commission filing. In 4 p.m. Nasdaq Stock Market composite trading yesterday, XM shares were up 1% to $11.60.
Stifel, Nicolaus & Co. analyst Blair Levin said the outcome of the Whole Foods case is a "mild positive" for XM-Sirius. XM spokesman Chance Patterson said the two satellite-radio companies expect the merger to close by year's end. He said Mr. Zients "did not want to comment" on his stock transaction.
The insider purchase is the first at XM for Mr. Zients. |
