Sirius, XM holders back satellite radio merger

By Franklin Paul

NEW YORK (Reuters) - Shareholders of both XM and Sirius satellite radio voted on Tuesday in favor of a planned $5.1 billion merger of the two rivals that still needs approval by the federal government.

Shareholders of Sirius Satellite Radio Inc approved the issuance of stock to help the company pay for the acquisition of rival XM Satellite Radio Holdings.

Shares of both companies jumped higher. Sirius stock ended Tuesday trading on Nasdaq up 6.5 percent to $3.63 and XM shares closed up 9.7 percent to $15.06, also on Nasdaq.

At a meeting in New York, Sirius, whose pay radio programming includes shock jock Howard Stern, lifestyle guru Martha Stewart and NFL Football, also approved a plan to increase the number of shares outstanding.

Meeting in Washington D.C., shareholders for XM, home to Oprah Winfrey and Major League Baseball, voted overwhelmingly to support the merger which must also be approved by the U.S. Federal Communications Commission and Department of Justice.

"We remain optimistic that the merger will be approved by the end of the year," XM said in a statement.

Traditional broadcasters have objected to the merger of the only two satellite broadcasters as anti-competitive. But XM and Sirius say they compete not only against each other but also against traditional radio and portable audio devices.

If the deal is not approved, Sirius Chief Executive Mel Karmazin told the Chicago Tribune in an interview published on November 9 that he would press on with the merger.