In a Wall Street Journal Interview, Mel Karmazin states that he would love to take the company private. The title of the article alone indicating that Sirius XM is sending signals, suggests that Mel is seeking bids on the company.
“…Given Sirius XM’s low stock price, Mr. Karmazin said he would love to take the company private. But given the state of the credit markets, “How do you find [the money] today?” If the company were generating positive cash flow, which he expects it to do for the full year in 2009, privatization would become much more feasible, he says…”
There may be several positives to this article. To begin with, a company like Microsoft, Apple or Google which has the cash to make an offer right now might be more quick to act as they would have no idea if the opportunity would pass them by in the way of a private offering. Mel has opened the negotiating door to any and all private equity firms.
My feeling is that no matter whether the company is taken private, or taken over, shareholders can expect a minimum bid of 4.00 per share. I base that number on the fact that Mel himself is averaged in the high 3.00 range. To make himself whole, he would seek at least that number.
With the stock trading below a dollar, that would be a 400% premium over the current price. That in itself should be an attractive proposition to Wall Street, and a recovery of the stock price may begin on this news.