Sirius Rolls Out New 24 Hour Investor Keening Channel
Apparently satellite mogul Charlie Ergen’s run at Sirius XM has been in the works for quite some time. Indeed, “people familiar with the situation” tell The Wall Street Journal that Ergen made an offer late last year to take control of struggling satellite radio outfit, but was rebuffed. His proposal: that one of his two satellite companies, EchoStar (SATS) or Dish Network (DISH), supply Sirius with enough capital to meet its debt obligations and avoid a bankruptcy filing. Clearly, then, Ergen isn’t looking to force Sirius into bankruptcy in order to claim its assets on the cheap, but rather because he sees it as a natural complement to his television operations.
Sirius CEO Mel Karmazin obviously doesn’t share that view, though he may soon come round.
With just a week or so left until its first round of debt obligations come due, Sirius (SIRI) is in a tight spot. As Karmazin told investors last week, the company needs to raise $175 million, and quickly. If it can’t, it will end up either filing for bankruptcy or cutting a deal with Ergen. Given that Karmazin himself invested $2.7 million in Sirius stock last summer, Karmazin may well opt for the latter. Unless, of course, another potential investor–say AT&T (T) or Liberty Media (LINTA)–comes sniffing around. Either way, it’s going to be a volatile and stressful week for Sirius investors.