Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

http://www.businessweek.com/news/2012-12-06/sirius-radio-plans-5-cent-special-dividend-stock-buyback

Bloomberg News

Sirius Radio Plans 5 Cent Special Dividend, Stock Buyback

December 06, 2012

Sirius XM Radio Inc. (SIRI:US), the satellite- radio broadcaster, said it will issue a special dividend of 5 cents a share and repurchase as much as $2 billion in stock. 

The special cash payout is payable Dec. 28 to stockholders of record as of Dec. 18, the company said today in a statement.

Sirius joins a growing number of companies paying special dividends or accelerating payments ahead of a potential U.S. tax increase next year. The total amount of the Sirius cash dividend is expected to be about $325 million, according to the New York- based company’s statement.

“The size of the capital return and the mix in favor of buybacks is roughly in line with our expectations, although the timing is slightly in advance of our forecasts,” James Ratcliffe, an analyst at Barclays Plc., said in a note to clients. Ratcliffe, who rates the shares the equivalent of hold, said he expected buybacks to be announced in January 2013.

“The desire to get the dividend in before a rise in dividend tax rates in 2013 drove the earlier announcement,” he said.

Liberty Media Corp. (LMCA:US), which owns about 49.8 percent of the company’s stock, will participate in the Sirius buyback program, the radio broadcaster said. Liberty will probably gain majority control of Sirius, pending Federal Communications Commission approval, in mid-January, Ratcliffe said.

The buybacks will be funded by cash on hand, future cash flow from operations, and borrowings under an existing revolving credit facility, according to the statement. Sirius plans to purchase stock “from time to time on the open market and in privately negotiated transactions,” the company said.  

Sirius rose less than 1 percent to $2.79 at the close in New York. The shares have gained 53 percent this year.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus