Actually the company and bank ALWAYS trade an OTC derivative. An example of standard terms is at https://investor.tiffany.com/node/20951/html. The OTC derivative specifies that a substantial number of shares (typically 80%) needs to be delivered by the bank to the company upfront. The other 20% of the shares are delivered by the bank at expiry of the OTC derivative. The nature of the risk underlying the OTC derivative is such that the bank is immune from small changes in stock price (delta neutral) at inception of the trade.

Existence of a short position in the market between two dealers should not necessarily inhibit the company from retiring shares. Even if the company used an open market repurchase instead of an ASR in order to buy back its shares, they would never know whether the stocks they repurchase resulted from a long sell or short sell by the counterparty due to anonymity on the stock exchange.