AOL Plans $400M Stock Buyback, Restructuring

by Christopher Freeburn | June 29, 2012 10:38 am

AOL (NYSE:AOL[1]) announced that it will repurchase $400 million in stock, beginning on July 28 and running through August 2, in a Dutch auction[2].

Under the terms of the auction, AOL shareholders can tender their shares at prices between $27 and $30 a share, Reuters noted.

The company will also use $40 million from an earlier share repurchase program in the upcoming auction.

The struggling Internet pioneer said the stock repurchase was part of an effort to return to shareholders the $1 billion it received for selling a number of patents to Microsoft (NASDAQ:

MSFT[3]) earlier this year.

The company said it had considered repurchasing more shares, but had decided to limit the share repurchase program to $400 million in order to avoid tax issues.

AOL said it is evaluating a range of other options to share the remaining proceeds of the patent sale with shareholders by the end of the year, including issuing a dividend.

The company also announced that it had promoted CFO Arthur Minson to COO in order to oversee its latest reorganization[4].

In tapping Minson to be COO, the company indicated that it will accelerate its plans to restructure its operations into three units: a consumer products group, a content brands unit, including the Huffington Post, and a business advertising unit. Minson will retain the CFO title until a new finance head can be found, Bloomberg noted.

AOL shares rose more than 1% in early Friday trading.

Source URL: https://investorplace.com/2012/06/aol-plans-400m-stock-buyback-restructuring/

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