Monday's BoA negative report on the Sirius (NASDAQ:SIRI)/XM Satellite Radio (XMSR) merger, while generating near-hysteria, added nothing new to the transaction in general or altered this publication's outlook on the deal. The mechanics of the deal will move forward regardless of Monday's activities and the focus will, and should, continue to be the FCC and DOJ reviews, regardless of the fluctuating odds of deal completion being tossed around.
Naturally, there is nothing new to report on the HSR second request process which is now in its second week. There will be no substantial information on the DOJ review for at least three months, and even then it may be difficult to clearly predict the regulator's direction. It can be assumed that the companies' legal staffs are working closely with the DOJ and are providing the initial response to the second request in the form of basic market data and corporate documentation. Once the DOJ begins to seek out and contact industry experts and/or competitors, the review process can be considered to be in full gear and perhaps some small amount of information will be leaked regarding progress, or lack thereof.
The FCC still has not started its review "clock" as of this posting. This is an unusually long delay from application filing to clock start, but perhaps not terribly surprising given the magnitude and publicity surrounding this combination. No new filings have been posted to the FCC's transaction page in the last seven days. Perhaps this is an indication that the staff is preparing to launch the review clock shortly, or perhaps it is simply an indication that the volume of filings coming in is so large that the staff simply is unable to keep up. Nevertheless, another batch of ex parte filings can be expected to appear on the transaction website very shortly, as can the beginning of the 180-day informal review period.
Despite the recent analytic reports offering various and ever-changing odds for this deal, this publication's position remains completely unchanged: the deal should not be allowed to proceed under current antitrust guidelines and FCC rules, but has roughly a 1-in-3 chance of successfully obtaining regulatory approval in the current FCC/DOJ environment.
Disclosure: We have no positions of any kind, in any security. We are a completely neutral source of research and analysis.