Sirius Canada and XM Canada announce merger
Almost five years after they began offering satellite radio service in Canada, Canadian Satellite Radio Holdings Inc. (CSR), the parent company of XM Canada and Sirius Canada today announced they have entered into an all-stock merger.
The Canadian merger announcement comes about three and a half years after Sirius and XM in the United States announced their merger. The U.S. merger closed in July of 2008.
Under the terms of the Canadian agreement, Sirius Canada shareholders will be issued treasury shares of CSR representing a 58.0 per cent equity interest in CSR immediately following closing of the transaction.
After the merger the Canadian subscriptions satellite radio company will have approximately 1.7 million subscribers and a combined enterprise value of approximately $520 million, which includes long-term debt of approximately $130 million.
The approximate ownership interest in CSR following closing of the combination transaction will be as follows: CSRI Inc., an entity controlled by John Bitove, the chairman of CSR, 30.0 per cent voting interest (22.7 per cent equity interest); CBC/Radio-Canada 20.2 per cent voting interest (15.0 per cent equity interest); Slaight Communications 20.2 per cent voting interest (15.0 per cent equity interest); Sirius XM Radio Inc. 25.0 per cent voting interest (37.1 per cent equity interest); with the remainder being widely held.
Subject to shareholder approval, following consummation of the combination transaction, CSR’s board of directors will consist of nine directors, including two directors nominated by each of CSRI Inc. and Sirius XM, one director nominated by each of CBC/Radio-Canada and Slaight Communications and three independent members. John Bitove will be Chairman of CSR. Subject to CRTC approval of the transaction Mark Redmond, the current President and CEO of Sirius Canada, will be President and CEO and Michael Washinushi, the current CFO of XM Canada, will be CFO. Michael Moskowitz will remain as CEO of XM Canada and Jason Redman will remain as CFO of Sirius Canada through the approval process and transition.
The companies will continue to operate independently until the transaction is completed. The transaction is subject to approval by CSR’s shareholders (other than Sirius XM and its affiliates) at a special meeting anticipated to be held in February 2011.
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