Bear Stearns issued a note today regarding the Sirius and XM announcement on pricing today, and cites they still see the merger being approved on its merits.

Report Excerpts:

More Choices, Lower Prices: XM/Sirius Highlight Merger-Specific Consumer Benefits

Companies Detail Plans on How They will Share the Benefits with Consumers.

XM and Sirius disclosed details of the new packages that consumers can expect to receive after the merger is approved. The following themes likely will resound in the FCC filing that is expected tomorrow (i) merger synergies allow sharing benefits with consumers, (ii) a la carte offerings possible for the first time in the media industry, (iii) more choices available to consumers, at lower prices, and including “best of” both, (iv) value proposition overwhelmingly good for consumers, and (v) substantial public interest benefits arising from the merger.

Eight Post-Merger Packages Proposed - All Arising Solely from the Merger - Availability in Phases in 2008. Expect the Companies to Go Beyond Just Rebuttal and Discussion on Competition -- XM/Sirius' Reply Likely Will Contain Concrete Proposals on Public Benefits.

In the extensive reply comments that are expected to be filed with the FCC tomorrow, in addition to the details that were disclosed this morning, we expect both companies to (i) respond to the questions raised by the commentators petitioning the FCC to enjoin the merger, (ii) discuss efficiencies specifically arising out of the merger and how the companies plan to “share” the benefits with the consumers, and (iii) refute that satellite radio is a separate market operating outside of the larger market for audio entertainment.

Implications for the Model.

While we haven't had the chance to run the assumptions through our models, we expect the ARPU in the merged model may be below our current assumptions, while sub growth will be higher and churn lower. Importantly, any sort of negative impact likely will be offset by the efficiencies arising from the merger.

We Continue to Believe the Merger Likely Will be Approved on Merits.

Our opinion is in fact a vote of confidence in the FCC and DOJ, who we believe will base their decisions on what’s best for consumers and the American public.

Position - Long Sirius, Long XM -IMOJB-