In an attempt to enhance shareholder return,
Liberty Global Inc.
), one of the largest triple play cable operators in the
international market, has declared the authorization of a share
repurchase program worth $1 billion. The company intends to spend
the proceeds in different periods of 2013.
At the end of the third quarter of 2012, Liberty Global had
$4,294.5 million of cash and marketable securities on its balance
sheet. However, the company had $26,461.5 million of outstanding
debt, which translates into higher interest payments, thereby
reducing the bottom line and earnings per share. The share
repurchase activity will not only fuel the company's earnings per
share but will also boost its share price.
Under the new $1-billion share buyback plan, the Englewood,
Colorado-based company plans to buy back its different class of
shares, which includes Series A, Series C or a combination of
both type during 2013.
The stock repurchase program may be done through open market
transaction or through privately-negotiated deals, which may
include derivative transactions. Nevertheless, the share buyback
timing will depend on market condition.
During 2012, Liberty Global repurchased shares worth $925
million, bringing the total amount of share brought to $9 billion
since the commencement of the program in 2005. This reflects the
company's consistent effort to boost the return to its
Though the company has declared weak third-quarter 2012
financial results, its losses narrowed considerably compared to
prior-year quarter. Moreover, deployment of high-speed DOCSIS 3.0
network has facilitated the company to compete with
Virgin Media Inc.
BT Group plc.
), and has also led to an increase in revenue. We believe these
factors along with a strong liquidity position have stimulated
the buyback decision.
We maintain our long-term Neutral recommendation on Liberty
Global. Currently, it has a Zacks #3 Rank, implying a short term
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