Polycom Announces $400 Mln Stock Buyback Program; Shares Rise - Update

(RTTNews) - Video-conferencing equipment maker Polycom, Inc. (PLCM) Wednesday said its board has authorized the firm to repurchase $400 million, or about 20 percent of its outstanding common stock. The company said the repurchase is consistent with its continuing commitment to deliver value to shareholders.

The shares are up about 8 percent in the morning trade on the Nasdaq.

According to Polycom, the repurchase will be made through a $250 million modified 'Dutch Auction' self-tender offer and expects to utilize the remaining $150 million for open market share repurchases or privately negotiated transactions.

The firm expects to fund the program with $150 million in cash and a new $250 million term loan. The tender offer is expected to commence on September 13, 2013, and expects to expire on October 30, unless extended.

Polycom intends to commence the $250 million self-tender offer at a price of not less than $10.00 and not more than $11.50 per share and, at the midpoint of such range, expects to purchase about 23 million shares.

The firm noted that the $400 million share repurchase authorization will supersede any remaining outstanding share repurchase authorization as of the commencement of the tender offer.

Kevin Parker, chairman of the board and interim CEO stated, "Today's announcement underscores our confidence in the company's business, our market position and the long-term growth potential of our industry."

The company has repurchased $84 million of common stock in the first and second quarters of 2013, and the remaining repurchase authorization was $89 million as of June 30, 2013. All the buybacks are expected to be completed within one year, it said.

Polycom has retained Morgan Stanley & Co. LLC as the dealer manager for the self-tender offer. LionTree Advisors is acting as capital markets advisor in connection with the overall transaction, including the contemplated financing and return of capital.

The firm has retained Morgan Stanley Senior Funding, Inc. as sole lead arranger and joint bookrunner for the new term loan facility, with maturity of five years.

PLCM is currently trading at $10.72, up 7.76 percent on the Nasdaq.