Time Warner buys back Google’s stake in AOL for $283 million
28 Jul 2009
Time Warner bought back 5 per cent stake in AOL, from Google for $283 million on 8 July, according to a document it filed with the Securities and Exchange Commission yesterday.
The buy-back price paid by Time Warner, which has been planning to spin off AOL since the past two years, places an enterprise value of $5.7 billion for all of AOL. The acquisition also includes cash distributions owed to Google from AOL during its investment.
Time Warner, the world's third-largest media and entertainment company had said in May that it intends to spin off AOL as an independent, publicly traded company by the end of the year. (See: Time Warner to spin off AOL as an independent company)
Time Warner chairman and CEO Jeff Bewkes had then said, ''We believe that a separation will be the best outcome for both Time Warner and AOL. The separation will be another critical step in the reshaping of Time Warner that we started at the beginning of last year, enabling us to focus to an even greater degree on our core content businesses.''
The independent company will be called AOL Inc., which will be traded on the New York Stock Exchange, according to the filing.
Since the time that the smaller AOL acquired Time Warner for $147 billion in 2001, (See: World's largest media company is born) the company has faced investors wrath for the billions in loss incurred by them in the value of their holdings.
