Canadian Satellite Radio Companies to Merge

All-stock deal signed; still subject to shareholder, regulatory approval
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More than two years after their American counterparts did so, XM Canada and Sirius Canada are merging.

The companies announced they’ve signed a deal to combine in an all-stock “merger of equals.” They peg the combined value of about $506 million (U.S.), including long-term debt of approximately $126 million.

Sirius Canada President/CEO Mark Redmond called a merger and its expected synergies “the next logical step in the evolution of satellite radio in Canada.”

Current shareholders of Sirius Canada — with nearly three times the subscribers of XM Canada — will have 58% of the equity in XM Canada parent Canadian Satellite Radio Holdings, led by Chairman John Bitove (30% voting interest, 22.7% equity interest) and CBC/Radio-Canada (20.2% voting interest, 15% equity interest). Slaight gets a 20.2% voting interest and 15% equity interest. The American Sirius XM Radio Inc. will hold a 25% voting interest and 37.1% equity interest.

In addition to Bitove, Sirius Canada president/CEO Mark Redmond and XM Canada CFO Michael Washinushi will hold the same positions at the merged company. XM Canada CEO Michael Moskowitz and Sirius Canada CFO Jason Redman remain in their respective positions now but will leave after the transition.

Shareholders and Canadian regulator Canadian Radio-television and Telecommunications Commission need to approve the deal. Once the deal closes, the board of the combined entity would have nine members, including two directors nominated by each XM Canada and Sirius Canada, one director nominated by each CBC/Radio-Canada and Slaight Communications and three independent members.

The companies estimate the combined entity will have a total subscriber base of more than 1.7 million. They will continue to operate independently until the deal closes.

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