Lucas Binder, an analyst for UBS issed a report today on the DOJ approval of the merger between Sirius and XM


Higher Likelihood of Merger Completion

SIRI-XMSR merger approved by DOJ; FCC could approve in early 2Q08

Following the approval of the SIRI-XMSR merger by the DOJ, we believe that the FCC could announce a ruling by early 2Q08. While neither SIRI nor XMSR has given guidance on what potential synergies may exist, we analyzed some key metrics in the combined business.

Projected pro-forma impact on 2010 multiples

We focus our analysis on the reduction of duplicate costs, specifically by lowering XMSR’s 2010 expenses. Using the midpoint of our assumptions, including the elimination of the XMSR marketing budget, reducing XMSR’s G&A by 50%, Programming and Content by 15% and R&D by 20% the combined company’s 2010 EV/EBITDA multiple decreases to 19.9x from 43.0x and 2010 P/FCF multiple decreases to 20.4x from 59.2x.

Tyler Savery Position - Long Sirius, Long XM