This excerpt taken from the SIRI 8-K filed Nov 5, 2007.
Supplemental Disclosure Concerning Reasons for the Merger
Sirius believes that the merger will result in significant cost synergies. Wall Street equity analysts have published estimates of the present value of cost synergies ranging from $3 billion to $9 billion. Sirius expects operating cost savings to be achievable in almost every cost item on the companies income statement, including:
Moreover, over the long-term, Sirius believes the combined company will derive significant additional value by procuring its future generation satellites and terrestrial repeaters as a single entity and by potentially reducing satellite, engineering and support requirements.
Supplemental Disclosure Concerning the Sirius Board of Directors Recommendation
The factors and risks considered by the Sirius board of directors in connection with its determination that the merger and entering into the merger agreement with XM are advisable and in the best interest of Sirius and its stockholders, and its approval thereof, also include the probability that other strategic alternatives would fail to provide Sirius stockholders with the same value, synergies and cost savings as would a business combination with XM.
Supplemental Disclosure Concerning Opinion of Financial Advisor to the Sirius Board of Directors
The table below lists premiums for the transactions reviewed in connection with this analysis:
Sirius paid Morgan Stanley $4,576,000 in connection with Morgan Stanleys services rendered as the administrative and collateral agent under its $250 million senior secured term credit facility. In addition, in the five years preceding the execution of the merger agreement, Sirius paid Morgan Stanley an aggregate of approximately $28,000,000 in connection with the underwriting and placement of various issuances of convertible debt securities and debt securities.
Supplemental Disclosure Concerning Regulatory Approvals Required for the Merger
In response to a Second Request for information relating to the merger from the U.S. Department of Justice, Sirius has produced millions of pages of documents from the files of many of its executives. These documents include business planning documents, documents discussing competition in the audio entertainment industry, pricing documents, as well as documents covering numerous other categories. In response to the Second Request, Sirius has also produced data regarding its business operations, including information on revenues, sales, and prices which was requested by the Department of Justice. As part of its investigation and as is typical in Second Request investigations, the Department of Justice has taken deposition testimony and, Sirius understands, has requested information from some third parties, including from Sirius competitors in audio entertainment. On September 4, 2007, Sirius and XM each certified to the Department of Justice that they were in substantial compliance with the Second Request.