Rumours of Live Nation & SiriusXM merger denied but analysts say it’s “inevitable”
Growing rumours about Live Nation and US satellite radio giant SiriusXM – either as a merger or with SiriusXM buying out the global live music empire – are officially being denied.
But US analysts insist it is nevertheless a good idea.
One has suggested it is “inevitable” and that Live Nation’s board is seriously considering a merger.
SiriusXM CEO Jim Meyer has had to contend with the rumours as he speaks to the market about his company’s second-quarter earnings.
When broached during an analyst call, Meyer said, “I don’t have any comment on Live Nation. I don’t even know where that speculation is coming from. It’s not coming from SiriusXM.
“We both use assets we have to improve our businesses, but for me, that’s about it.”
However, he did say that the two enjoy a “growing and strong cooperation” and have talked about working closer together.
This makes sense, as SiriusXM parent company Liberty Media owns one-third of Live Nation.
Meyer sits on the Live Nation board and Live Nation CEO Michael Rapino sits in the SiriusXM boardroom.
SiriusXM this week released its latest financials, seeing quarterly earnings up 45% to US$292 million, compared with a year-ago profit of $202 million.
Overall revenue was up 6% and 483,000 new subscribers came on board in this period.
Nevertheless, analysts argue that SiriusXM would have to be worried in the long run-run, as streaming and podcast apps are threatening its in-car radio business.
Brandon Ross of BTIG Research insists that Live Nation’s board is considering a merger and says that the end result would be a powerful end-to-end music distribution platform from live music to streaming music and radio.”
“We and a growing group of investors have come to believe a nearer-term combination of SiriusXM and Live Nation is inevitable,
“Or, put another way, that Liberty would like a deal to happen, which likely makes a transaction inevitable.
Citigroup’s Jason Bazinet said it would create a “vertically integrated music titan.”
The rumours of a merger saw Live Nation’s share price climb above $50 for the first time.
Live Nation is announcing its second-quarter financials overnight (Australian time) so it will be interesting to see if Rapino adds anything to this current debate.