AOL launches $400 mn share buyback

Jun 28, 2012
AOL launched a $400 million stock buyback in the latest move aimed at improving shareholder value at the Internet and media group.

AOL on Thursday launched a $400 million stock buyback in the latest move aimed at improving shareholder value at the Internet and media group.

The company, which fended off a challenge from a hedge fund to revamp its board, said it had begun a modified "Dutch auction" to repurchase shares and boosted the total amount AOL intends to return to shareholders in 2012 to $1.1 billion.

AOL has been struggling since the collapse of its leadership as an Internet subscription service, and has been seeking to become a more diversified Web firm. But it earned a profit of $21 million in the past quarter.

With pressure coming from activists at the Starboard Value hedge fund, AOL reached a deal recently to sell 800 patents to Microsoft, bringing in around $1 billion.

The share buyback combined with the patent deal allows money to be returned to shareholders while minimizing tax obligations.

"Today's announcement is an important first step in returning 100 percent of the proceeds from our patent transaction as expediently and tax efficiently as possible," said Tim Armstrong, AOL's chairman and chief executive.

"AOL is focused on continued execution and operational improvement. Concurrently reducing our shares outstanding at attractive prices underscores both financial prudence and our significant belief in the opportunity in front of AOL."

The company fused with news and entertainment giant Time Warner in 2001 at the height of the dotcom boom in what is seen as one of the most disastrous mergers ever. It was spun off by Time Warner in December 2009 into an independent company.

Under chief executive Tim Armstrong, AOL has invested heavily in online content, purchasing The and websites and putting money in local news network Patch.

shares are close to their highest level since the 2009 spinoff and rose another 2.4 percent to $27.98 in morning trade.

Explore further: Amid scrutiny, Uber vows bigger focus on safety

add to favorites email to friend print save as pdf

Related Stories

AOL says to sell 800 patents to Microsoft for $1.0 bn

Apr 09, 2012

AOL announced plans to sell more than 800 patents to Microsoft in a $1.056 billion deal giving the struggling Internet pioneer a needed cash injection as it seeks to fend off pressure from shareholders.

US hedge fund seeks five seats on AOL board

Feb 24, 2012

A US hedge fund with a large stake in AOL laid claim on Friday to five seats on the board of directors of the Internet company and criticized the strategy of the current management.

Huff Post closes deal to join AOL

Mar 07, 2011

The Huffington Post officially joined AOL Monday, celebrating with the announcement that it had nabbed reporters from The New York Times, Yahoo!, and even Rupert Murdoch's new iPad newspaper The Daily.

AOL shareholders re-elect all 8 board members

Jun 14, 2012

(AP) — AOL Inc. said Thursday shareholders voted at their annual meeting to re-elect all eight directors on the company's board, fending off a takeover attempt by one of its largest investors.

AOL cutting over 900 jobs in US, India

Mar 10, 2011

Internet company AOL is cutting more than 900 jobs as it joins forces with The Huffington Post and seeks to reinvent itself as a major player in online news.

Recommended for you

Two more former Sony workers sue over data breach

2 hours ago

Two more former employees of Sony Pictures Entertainment are suing the company over the massive data breach in which their personal and financial information was stolen and posted online.

Constantly changing online prices stump shoppers

4 hours ago

Online shopping has become as volatile as stock market trading. Wild, minute-by-minute price swings on everything from clothes to TVs have made it difficult for holiday shoppers to "buy low."

'Interview' ordeal at Sony just its latest crisis

7 hours ago

How do you say "damage control" in Japanese? Sony Corp. is sealed within a hermetic cone of silence as executives try to prevent the slow motion train wreck at Sony Pictures from damaging the rest of the ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.