AOL announced its final steps in returning $1.1 billion to shareholders, entering into a $600 million fixed-dollar collared Accelerated Stock Repurchase Agreement with Barclays, and announcing its authorization of a $5.15 per share special cash dividend.
The company will repurchase $600 million worth of common stock under the agreement, taking advantage of the share repurchase authorization it announced before, and an incremental $10 million authorized by the company on Sunday.
The company will pay the $600 million at the beginning of the agreement, and says it expects to receive shares throughout the remainder of the year and a substantial majority of the shares underlying the transaction before the end of the year.
This includes nearly 4 million shares that Barclays will deliver to AOL on August 30. The exact number of shares AOL will repurchase under the agreement will be based on a discount to the volume-weighted average share price of AOL common stock during the agreement period adjusted down by $5.15 for the payment of the special dividend, AOL says, noting that the purchase price will also be subject to floor and cap provisions, establishing a minimum and maximum number of repurchased shares.
CEO Tim Armstrong said, “Today’s announcement underscores AOL’s commitment to delivering value for our shareholders. AOL remains committed to creating and unlocking value for all shareholders through smart execution and disciplined management of our asset portfolio.”
“Since becoming a public company in December 2009, we have demonstrated an ability to both unlock and prudently manage our valuable asset portfolio, including our tax assets,” said COO and acting CFO Artie Minson. “Today we have done both again, outlining a clear path to returning $1.1 billion in cash to shareholders, while putting in place a necessary mechanism to ensure the preservation of our valuable tax assets.”
AOL has also adopted a Tax Asset Protection Plan. AOL provides more details on that in a press release.
Image: BBDO Digital Lab (YouTube).