Expedia backpedals on ASR plans; $1 billion in shareholder value destroyed
Citing unacceptable terms in the current debt market, Expedia’s chairman Barry Diller announced that the company is scaling back its stock repurchase program to a maximum of 25 million shares, down from the 116 million shares announced in June.
The market reacted unfavorably to the announcement, driving the share price down over 12% in 2 days.
###
PAYOUT YIELD ANALYSIS
The new target of 25 million shares would return up to $750 million to shareholders. With 303 million shares outstanding, the repurchase would return $2.48 per share. Without a regular dividend in place, the Total Payout promises to be $2.48 per share. At a share price of $26, the Total Payout Yield would be 9.5%.
We believe that the appropriate question for Mr. Diller is this - What debt market terms were so unnacceptable as to justify the destruction of over $1 billion of shareholder value in two days?
- Payout Yield Staff
Leave a Reply
You must be logged in to post a comment.