AOL, Inc. (NYSE:AOL) is entering the final phase of its structured plan, and announced today that it has reached an agreement with Barclays PLC (NYSE:BCS) (LON:BARC) for a $600 million fixed-dollar collared ‘Accelerated Stock Repurchase Agreement’ and have also received authorization for a ‘special’ one-time cash dividend of $5.15 per share. In the final phase company plans to return $1.1 billion to its shareholders.
“Today’s announcement underscores AOL’s commitment to delivering value for our shareholders,” said AOL Chairman and CEO, Tim Armstrong. “AOL remains committed to creating and unlocking value for all shareholders through smart execution and disciplined management of our asset portfolio.”
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As per the deal, AOL, Inc. (NYSE:AOL) will be paying $600 million initially and will be receiving shares throughout the remainder of the year, including approximately 4 million shares to be returned by Barclays on August 30, 2012. The dividend of $5.15 per share will be payable on December 14, 2012.
Internet media and services firm, repurchased $400 million worth of shares of its common stock in late June 2012, as a part of its structuring plan. Also, the company entered into a sell agreement with software giant Microsoft Corporation (NASDAQ:MSFT) earlier this year, for more than 800 of its patents and license 300 additional patents and applications for $1 billion in cash.
AOL, Inc. (NYSE:AOL), owner of the Huffington Post and TechCrunch websites, peaked its value since it’s spun off with Time Warner Inc. (TWX) in 2009, mainly due to an increase in advertising revenue and a one-time gain on a patent sale that guided the company back to profit in the second quarter. AOL, Inc. (NYSE:AOL) also resorted to a tax asset protection plan that requires an approval from board for acquiring more than 4.9 percent of its outstanding shares.
“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 AOL Chief Operating Officer and Acting Chief Financial Officer, 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.”
Discounting the announcement, shares jumped 8.1 percent to $35.58 at 7:37 a.m. New York time before the markets opened.