Sirius XM Radio’s board has approved a $2 billion common stock repurchase program. Liberty Media Corporation, which now owns 49.8% of the company’s stock and will soon take control of the company, says it will participate in the share repurchases on a pro rata basis so that its relative ownership interest will not be affected by the program. The company will fund the repurchases through cash on hand, future cash flow from operations and borrowings under its revolving credit facility.
The board also declared a special cash dividend in the amount of $0.05 per share of common stock, payable on 12/28/12 to stockholders of record as of the close of business on 12/18/12. Sirius XM’s preferred stock will participate in the dividend on an as-converted basis in accordance with its terms. The total amount of the cash dividend is expected to be $325 million.
The combined announcement reflects the Board’s desire to return value to stockholders and its confidence in the long-term growth prospects of the company’s business.