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U.S. FCC's Martin dampens XM, Sirius merger hopes
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| U.S. FCC's Martin dampens XM, Sirius merger hopes
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| got1toburn |
WASHINGTON, Jan 17 (Reuters) - The Federal Communications Commission said on Wednesday licenses held by XM Satellite Radio Holdings Inc. (XMSR.O: Quote, Profile , Research) and Sirius Satellite Radio (SIRI.O: Quote, Profile , Research) prevent them from combining, but one industry expert said they could ask for the licenses to be modified.
"There's a prohibition on one entity owning both of those licenses," FCC Chairman Kevin Martin told reporters during a news conference after an agency meeting. However, Martin also said the FCC would examine any transaction submitted to it.
Wall Street analysts have speculated about a possible combination of the two providers and the stocks have risen sharply in recent weeks.
XM and Sirius could ask the FCC to modify their licenses to permit a combination, according to David Kaut, an analyst at Stifel, Nicolaus & Co.
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"If the FCC wants to permit (the merger), based on the totality of their public-interest analysis, they would lift the prohibition," Kaut said. "If they don't want to approve, they'd probably keep the rule."
Both Sirius and XM are growing rapidly, but losing money as they try to improve technology and pay for top entertainment ranging from the largest U.S. sports leagues to celebrities such as Howard Stern, Oprah Winfrey and Martha Stewart.
XM shares were down more than 8 percent at $15.74 while Sirius shares fell more than 6 percent to $3.90 in mid-afternoon trading on Nasdaq.
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