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  1. zcurzan is offline
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    06-30-2008, 10:47 AM #11
    I guess those big savings (ie. OEM deal and contract renegotiations) are so up in the air that they choose not to comment on them. It's fine for analysts to speculate, but I think its kind of bad business for the hypothetical combined company to be publically speculating at how much they can squeeze the companies with whom they currently have contracts. I know that would piss me off.

    "Who do they think they are?"

    Maybe it was smart to just kind of comment on near term efficiencies that can be realized. Most of these long term projections go out, what like 5-7 years? 10 years? 400 mil a year x 10 years = 4 bil.

  2. Newman is offline
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    06-30-2008, 10:48 AM #12
    The thing that people need to remember:

    There are costs associated with bringing a company together. This $400 million net synergies is a very good number. How much do you think it would cost to bring the two systems together for a 11 BILLION dollar company? The majority of those costs are going to be seen in the first year, yet the company still expects to see $400 million in synergies. I can only guess about 2010, but I would expect it to be at least double that.

    And yes, all the synergy outlooks are long term. Long term usually means 5-10 years. $400 million over 10 years is still $4 billion.

  3. john is offline
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    06-30-2008, 11:21 AM #13
    Absolutely correct, Newman. I think the big synergies wont even start till at least the second or third year. I really dought very many analyst were expecting 400 million in the first year.

  4. zcurzan is offline
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    06-30-2008, 11:25 AM #14
    I'd like to see some analyst responses, or thoughts regarding this guidance. But I suppose we won't really get that until we get an official approval from the FCC.

  5. homer985 is offline
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    06-30-2008, 11:49 AM #15
    Quote Originally Posted by zcurzan View Post
    Good point. It would make sense that the OT work at XMSR was for this. How do you think the market is going to react to this news?
    No offense, but not a chance. These two companies have a very good idea of each others finances at this point, to be able to put forth a rough estimate on forward looking guidance. Don't kid yourself into thinking that they needed to burn the midnight lamp, just to be able to figure out that they would have $400 million in synergies the first year -- and $300 million in adjusted EBITDA. You don't have to look that closely at your numbers to be able to figure that out.

    Why put in OT to close the quarter? Simple. It takes time to close out a quarter -- days, if not a couple of weeks. If the merger is close to be consumated, then the sooner the better. The problem is, if they're in the middle of closing out the quarter and the merger comes down -- it will delay the close of the merger.

    Thus, they close the quarter as early and quick as possible, like they are. Then if they get FCC approval in the next week or two, they will be able to close out the last couple of weeks very quickly -- and can likely close the merger within a day, at the most.

    I have no doubt that they're busting ass to get their numbers crunched and all -- the last thing they want is to get FCC approval, only to have it delayed a week or so while they close out Q2's books, as well as prepare for closing out the merger. In the time that that may be going down, it gives the NAB (or others) a chance to formulate options to challenge the FCC's decision in the Court of Appeals. Or any other number of blockades...

    No way, they'll want everything done and out of the way so that if/when the FCC greenlights it -- it's going to be consumated and closed so fast, your head is going to spin.

    As I said in the other thread, the Dow Jones blurb had nothing to do with this Sirius PR.

  6. one959 is offline
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    06-30-2008, 12:02 PM #16
    Quote Originally Posted by homer985 View Post
    -- it's going to be consumated and closed so fast, your head is going to spin.
    I certainly agree with this, if you guys recall, in the past when Mel has been asked how quickly after the approval could the companies close the deal he has stated something very close to; "we'll be filing the paperwork the very next morning".

  7. homer985 is offline
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    06-30-2008, 01:05 PM #17
    Here's a perfect example... AT&T merger with BellSouth...

    December 28, 2006 (afternoon)... AT&T/Bellsouth agree and file with the FCC new concessions to push the merger through;
    December 29, 2006 (afternoon)... the FCC formally approves and announces approval of the merger
    December 29, 2006 (by 5:30PM EDT)... AT&T/BellSouth officially consumate and close the merger -- just hours after FCC approval

  8. zcurzan is offline
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    06-30-2008, 01:18 PM #18
    Thanks homer, that does make more sense. And I do remember that quote about closing the next morning....And that was long before all this extra delay.

  9. Seamless82 is offline
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    06-30-2008, 02:37 PM #19

    Spectrum / Merger / Politics

    Senator Kerry wrote a letter to the FCC - was just posted today. Him and 2 other senators want them to give up as much as 50% of their spectrum.

  10. zcurzan is offline
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    06-30-2008, 03:00 PM #20
    Quote Originally Posted by Seamless82 View Post
    Senator Kerry wrote a letter to the FCC - was just posted today. Him and 2 other senators want them to give up as much as 50% of their spectrum.
    Not too worried about that. It's such an outlandish request seeing as there has been no indication that Georgetown's proposal was being taken seriously. Plus this isn't news (besides a new piece of paper) as I think Kerry came out against it much earlier in the process.

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