Robert Peck of Bear Stearns issued a report today on the DOJ approval of the Sirius and XM merger. Peck carries a $5.50 price target for Sirius, and a $24 price target for XM.


Finally! Justice Delayed, But Not Denied

As expected, though long overdue, the DOJ announced that it was closing its investigation of XM’s merger with Sirius, in other words approving the deal from an antitrust perspective.

· FCC Approval Next. With shareholder approval in November 2007, the only regulatory step left is the FCC approval, which we think is likely over the next 30 days. Note, the FCC and DOJ likely coordinated their decisions, hence approval is not likely in question. The FCC Chairman has stated that he has a very favorable opinion of the a la carte pricing schema proposed by Sirius and XM. As a result, we do not think the FCC’s conditions to the merger are likely to be onerous.

· Debt Refi - The Next Step. At its 4Q07 conference call, XM had disclosed that it was in discussions to potentially refinance debt with change of control provision likely impacting $600M 9.75% notes, $200M floating rate notes, and $230M satellite sale & leaseback debt. While the credit environment is not very favorable, we anticipate the companies will be able to refinance the existing debt even if they have to pay some premium for rolling over the debt to the merged company.

Tyler Savery Position - Long Sirius, Long XM