Capital Markets

Liberty Media Plans Dutch-Auction Offer

CEO admits that the company "probably should have bought more" of its shares during the first quarter.
Stephen TaubMay 9, 2007

Liberty Media plans to buy up to $500 million of its common stock in a Dutch Auction self-tender offer for between $23.75 and $25.75 per share.

The low end of that range represents a 0.3 percent discount and the high end represents an 8.1 percent premium to its closing share price on May 8, the media company noted in its announcement. Liberty said it expects to launch the offer within five business days.

The announcement came one day after several analysts questioned why Liberty did not repurchase more of its stock in the first quarter, the Associated Press pointed out.

“On the LINTA [Liberty Interactive] buyback, I think we probably — with absolute hindsight — bought too little during the quarter, and we probably should have bought more,” Greg Maffei, Liberty Media’s chief executive officer reportedly said during a conference call with analysts.

Under a Dutch auction, shareholders submit bids to sell their shares at a price within the company’s set range. The company then sets the price based on the bid with the lowest price that would enable it to buy back all of the shares it plans to purchase. (