Dallas, Texas 08/26/2014 (FINANCIALSTRENDS) – Sirius XM Holdings Inc. (NASDAQ:SIRI) the radio broadcaster with unconventional financial instruments had in July this year offered a repurchase program. The repurchase program was announced just after its May fresh debt issue to the tune of $750 M in senior notes due in 2024 for institution-buyers.
In the repurchase program, the aggregate buyback authorization was to the tune of $6 billion. A key figure in these programs is the transactions related to Liberty Media and other affiliates.
Recently, Liberty Media (NASDAQ:LMCA) announced that it had widened its interest in the radio broadcasting company to 56%, by the end of the second quarter. Liberty Media, incidentally, is poised to spin-off one of its segments, the broadband services by the latter half of this year.
As part of the spin-off process, shareholders will now be richer by one-fourth part of a share in the Liberty Media’s common stock.
Sirius XM Holdings Inc. (NASDAQ:SIRI) with the repurchase program has definitely exposed itself to greater risk. However, it does offer scope for corrective measures as well. The ‘short interest’ factor associated with it, it will now prove to be an advantage as the second part of the ASR comes into play.
Analysts also see this as the last of the bad debt possibilities for this stock. This will be because of the expiration to the tune of six year run, besides looking at feature where the debt is not due in the period.
The repurchase program is expected to pay direct and indirect benefits as the longish period of the buffer zone Sirius will now be able to enjoy will off-set any of the negative factors, if any!