Filed by Sirius Satellite Radio Inc.
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed
pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: XM Satellite Radio Holdings Inc.
Commission File No.: 0-27441
This communication contains “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include, but are not limited to,
statements about the benefits of the business combination transaction involving Sirius Satellite
Radio Inc. and XM Satellite Radio Holdings Inc., including potential synergies and cost savings and
the timing thereof, future financial and operating results, the combined company’s plans,
objectives, expectations and intentions with respect to future operations, products and services;
and other statements identified by words such as “anticipate,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “will,” “should,” “may,” or words of similar meaning. Such forward-looking
statements are based upon the current beliefs and expectations of SIRIUS’ and XM’s management and
are inherently subject to significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally beyond the control of SIRIUS
and XM. Actual results may differ materially from the results anticipated in these forward-looking
statements.
The following factors, among others, could cause actual results to differ materially from the
anticipated results or other expectations expressed in the forward-looking statement: general
business and economic conditions; the performance of financial markets and interest rates; the
ability to obtain governmental approvals of the transaction on a timely basis; the failure of
SIRIUS and XM stockholders to approve the transaction; the failure to realize synergies and
cost-savings from the transaction or delay in realization thereof; the businesses of SIRIUS and XM
may not be combined successfully, or such combination may take longer, be more difficult,
time-consuming or costly to accomplish than expected; and operating costs and business disruption
following the merger, including adverse effects on employee retention and on our business
relationships with third parties, including manufacturers of radios, retailers, automakers and
programming providers. Additional factors that could cause SIRIUS’ and XM’s results to differ
materially from those described in the forward-looking statements can be found in SIRIUS’ and XM’s
Annual Reports on Form 10-K for the year ended December 31, 2006, which are filed with the
Securities and Exchange Commission (the “SEC”) and available at the SEC’s Internet site
(http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and
SIRIUS and XM disclaim any intention or obligation to update any forward looking statements as a
result of developments occurring after the date of this communication.
Important Additional Information Will be Filed with the SEC
This communication is being made in respect of the proposed business combination involving
SIRIUS and XM. In connection with the proposed transaction, SIRIUS plans to file with the SEC a
Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS
and XM plans to file with the SEC other documents regarding the proposed transaction. The
definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of SIRIUS and XM.
INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the Registration
Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed with
the SEC by SIRIUS and XM through the web site maintained by the SEC at www.sec.gov. Free copies of
the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other
documents filed with the SEC can also be obtained by directing a request to Sirius Satellite Radio
Inc., 1221 Avenue of the Americas, 36th Floor, New York, NY 10020, Attention: Investor
Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place,
N.E., Washington, DC 20002, Attention: Investor Relations.
SIRIUS, XM and their respective directors and executive officers and other persons may be
deemed to be participants in the solicitation of proxies in respect of the proposed transaction.
Information regarding SIRIUS’ directors and executive officers is available in its Annual Report on
Form 10-K for the year ended December 31, 2006, which was filed with the SEC on March 1, 2007, and
its proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on
April 21, 2006, and information regarding XM’s directors and executive officers is available in
XM’s Annual Report on Form 10-K, for the year ended December 31, 2006, which was filed with the SEC
on March 1, 2007 and its proxy statement for its 2006 annual meeting of stockholders, which was
filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or
otherwise, will be contained in the Joint Proxy Statement/Prospectus and other relevant materials
to be filed with the SEC when they become available.
***
On
March 16, 2007, the Bismarck Tribune (Bismarck, North Dakota) published the letter below from David Frear, Executive
Vice President and Chief Financial Officer of Sirius Satellite Radio Inc.
In defense of Sirius-XM merger
By DAVID FREAR
New York
On behalf of everyone at Sirius and XM, we appreciated Tribune columnist Kelly Hagen’s proclaiming
satellite radio to be among the “greatest things ever.” (“XM-Sirius merger is not music to my
ears,” March 9) In fact, we couldn’t agree more. But we would like to correct what he wrote about
subscription prices once the proposed merger between Sirius and XM is completed.
The merger of Sirius-XM is a win-win for consumers because we will be able to offer more choices
and better prices. That’s the bottom line — and it’s something that we have committed to publicly
for everyone to hear.
It’s as simple as this: If people are Sirius or XM subscribers and currently pay the normal rate,
they will not pay more than that rate for the same level of service after the merger.
Alternatively, if after the merger they are interested in obtaining the best programming from both
SIRIUS and XM, they can get it for less than it would cost to subscribe to both services today. In
either case, they’ll always be able to use their current radios.
As Hagen noted, XM and Sirius compete against AM/FM radio — a free, ubiquitous service with over
230 million weekly listeners in the U.S., as compared to the 14 million combined subscribers
satellite radio has today. In order for us to effectively compete and continue to win over
subscribers from free radio, our pricing needs to remain competitive. In an industry characterized
by constant change, the merger of Sirius and XM will make audio entertainment better for consumers
in myriad ways: More choice, more innovation, better pricing and a stronger competitor in the audio
entertainment landscape.
As for Hagen’s suggestion of an “All Lynyrd Skynyrd, All The Time” station, we’ll gladly take that
under advisement.
(Frear is executive vice president and chief financial officer of Sirius Satellite Radio. — Editor)