Sirius XM Radio Inc (NASDAQ:SIRI) Announces Buyback

Steve Hackney - October 11, 2013

Boston, MA 10/11/2013 (wallstreetpr) – Sirius XM Radio Inc (NASDAQ:SIRI)’s shares rose on announcement by the board that they intend to buyback an additional $2 billion stocks financing the repurchase through cash currently available as well as that generated in future operations as well as future borrowings. The repurchase is expected to benefit  Liberty Media Corp (NASDAQ:LMCA) as the company has announced that it will pick up $500 million worth of shares from Liberty and its affiliates. The balance shares will be picked up from the open markets and through privately negotiated transactions. The investment in Sirius in 2009 is giving very good returns to Liberty with its investment being valued at several billions of dollars. Liberty had extended a loan of $530 million in rescue financing to Sirius in 2009 at the height of the financial meltdown. Both parties had agreed to a 3 year standstill and Sirius had also agreed not to adopt any poison pill measure to stop Liberty from takeover after the expiry of the 3 year standstill. Liberty took over Sirius in January, 2013. A court of law has also approved the takeover, ruling that the board of Sirius did not breach its duty to the shareholders by allowing the takeover without any premium for the stock.

The past four quarters have been mixed for Sirius, revenues have been risings but earnings are showing mixed signs. Sirius is also lagging behind its competitors in its year-to-date performance. It is exploring expansion overseas as a new revenue stream outside the U.S. as it is currently focused only on the U.S. The company has also acquired the connected car services unit of a competitor for a deal worth $530 million. The deal is expected to close in the fourth quarter only. The company is also branching out from its current offerings of music and talk shows and it is looking at providing other value added services in cars. The stock should continue to give good returns ahead.

Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

Leave a Reply

Your email address will not be published. Required fields are marked *