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Sirius Satellite Offering Shares, Notes

NEW YORK (AP) _ Sirius Satellite Radio Inc. Friday followed its signing of radio ``shock jock'' Howard Stern by announcing an offering of stock and bonds that would raise $290 million.

The New York-based satellite radio broadcaster will offer 25 million shares at $3.87 apiece and $200 million of convertible notes due 2011, it said.

In morning trading, shares of Sirius fell 18 cents, or 4.6 percent, to $3.81 on the Nasdaq Stock Market. The stock traded around $3.25 before the announcement that Stern was coming on board.

The proceeds will be used for general corporate purposes, including investments in programming, infrastructure, and retail and automotive distribution arrangements, the company said.

Managers of the offerings received an option to sell up to an additional 3.75 million shares, worth around $14.5 million, and $30 million of convertible notes to meet demand.

The offerings are expected to close Oct. 13.

Sirius Wednesday agreed to pay Stern, who built his career in good part by pushing raunchy content, $500 million over five years to leap from conventional airwaves to satellite radio by 2006, after his contract with Viacom Inc.'s Infinity Broadcasting ends.

His show is heard by more than 10 million listeners.

Sirius, which now has more than 600,000 subscribers, hopes Stern will bring in 4 million new recruits and catapult its business into the black. They said they'd need at least 1 million to cover the costs of signing Stern.

Stern's show will air as part of Sirius' basic package, which costs $12.95 a month.

Sirius has 500 employees and 2003 revenue of $12.9 million. It is one of two companies trying to make satellite radio a viable business. Its competitor, XM Satellite Radio Holdings Inc., launched its own marketing weapon this week: shock jocks Opie and Anthony, who were yanked off the air for broadcasting two listeners having sex inside St. Patrick's Cathedral.
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