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Sirius Radio Plans 5 Cent Special Dividend, Stock Buyback
By Alex Sherman - Dec 6, 2012 7:02 AM PT
Sirius XM Radio Inc. (SIRI), 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.