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Satellite mogul Charles Ergen made an unsolicited offer late last year to take control of Sirius XM Radio Inc. [SIRI
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], and was rebuffed, the Wall Street Journal said, citing people familiar with the situation.
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Ergen proposed for one of his satellite companies -- EchoStar Corp. [SATS
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] or Dish Network Corp. [DISH
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] -- to inject enough capital into Sirius for it to meet its debt obligations and avoid a bankruptcy filing, the newspaper cited the people as saying.
Despite the rejection, Ergen has recently reiterated his interest in taking control of Sirius, the paper said.
Even if Ergen succeeds in acquiring control of Sirius, however, it is far from certain that federal regulators, whose approval would be required, would welcome the union of satellite television and radio, the newspaper added.
Sirius XM has nearly $1 billion in debt due this year, prompting many on Wall Street to doubt its future given the sluggish credit market and a steep drop in car sales -- the biggest source of new satellite radio subscribers.
Ergen's move has put Sirius Chief Executive Mel Karmazin in a corner, the Journal said.
In discussions with investors last week, Karmazin said that unless he could raise $175 million, he would be faced with one of two options: having Sirius file for bankruptcy or cutting a deal with Ergen, the paper said. An EchoStar spokesman could not be immediately reached for comment by Reuters. Sirius too could not be immediately reached for comment by Reuters.
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