Report: Sirius Got, And Rebuffed, Ergen Bid
February 9, 2009 at 4:59 AM (PT)
Satellite mogul CHARLES ERGEN made an unsolicited offer late last year to take control of SIRIUS XM RADIO INC. and was rebuffed, reports REUTERS, citing a THE WALL STREET JOURNAL as a source. ERGEN proposed for one of his satellite companies -- ECHOSTAR CORP or DISH NETWORK CORP -- to inject enough capital into SIRIUS for it to meet its debt obligations and avoid a bankruptcy filing.
Despite the rejection, ERGEN has recently reiterated his interest in taking control of SIRIUS, the report said.
Even if ERGEN succeeds in acquiring control of SIRIUS, however, it is far from certain that federal regulators, whose approval would be required, would welcome the union of satellite television and radio.
SIRIUS XM has nearly $1 billion in debt due this year, prompting many on WALL STREET to doubt its future given the sluggish credit market and a steep drop in car sales -- the biggest source of new satellite radio subscribers.
ERGEN's move has put SIRIUS Chief Executive MEL KARMAZIN in a corner, the report said.
In discussions with investors last week, KARMAZIN said that unless he could raise $175 million, he would be faced with one of two options: having SIRIUS file for bankruptcy or cutting a deal with ERGEN.