(By Balaseshan) AOL Inc. (NYSE:AOL) said it is in final steps returning about $1.1 billion to the Internet company's shareholders in 2012, by repurchasing $600 million of stock and authorizing $5.15 per share special cash dividend.
AOL entered into a $600 million fixed-dollar collared Accelerated Stock Repurchase Agreement with Barclays Bank plc. The buy back utilizes the share repurchase authorization approved previously and an incremental $10 million plan authorized on August 26.
AOL will pay the $600 million at the beginning of the agreement and expects to receive shares throughout the remainder of the year and a substantial majority of the shares underlying the transaction before year-end, including about 4 million shares that Barclays will deliver to AOL on August 30.
The specific number of shares AOL will ultimately 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.
Additionally, the company authorized a special, one-time, cash dividend of $5.15 per share, payable on December 14 to shareholders of record at the close of business on December 5. AOL expects to announce the anticipated treatment of the dividend for tax purposes prior to the ex-dividend date of November 30.
"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," Minson added.
AOL closed Friday's regular session up 0.40% at $32.92. The stock has been trading between $11.07 and $34.51 for the past 52 weeks.