Sirius XM Holdings Inc (SIRI)

[eastunder]

XM, Starbucks End Marketing Agreement
AP
Posted: 2008-01-07 12:07:12
NEW YORK (AP) - XM Satellite Radio Holdings Inc. will no longer broadcast the Starbucks XM Cafe channel after ending a marketing agreement with the coffee chain operator, the company said in a regulatory filing Monday.

As part of the breakup, Starbucks has the right to sell $22 million in XM shares. At the time of the filing, that amounted to about 1.85 million shares, which represents less than 1 percent of XM's total 314.2 million shares outstanding at the end of September.

XM said in the filing that if Starbucks does not realize $22 million from the stock sale, XM may be forced to issue more shares to Starbucks or pay the difference in cash.

XM shares plunged $1.40, or 11 percent, to $11.36 in midday trading. In the past year, the stock has ranged from $10.37 to $17.70.

XM said it listeners would be able to tune in the Starbucks channel for a limited time. The station plays "mellow" alternative and acoustic rock music, according to XM's Web site.

XM is in the process of being acquired by smaller rival Sirius Satellite Radio Inc. The deal requires regulatory approval.

Starbucks shares added 43 cents, or 2.4 percent, to $18.54.