* Dutch auction tender offer of $400 mln
* Includes $40 million of stock repurchase program
* AOL is considering other payouts, including dividends
June 28 AOL Inc is taking its first step
to returning to shareholders the proceeds of its patent sale to
Microsoft, with a Dutch auction tender offer to
repurchase $400 million in stock.
Under the terms of the offer, which starts on July 28 and
ends on Aug. 2, AOL shareholders will have the opportunity to
tender their shares at a price within the range of $27 to $30
Shares of AOL were trading up slightly 30 cents at $27.61 in
afternoon trade on the New York Stock Exchange.
The auction is one way that AOL plans to return to its
stakeholders a little more than $1 billion from the patent sale.
AOL said its preferred method to return 100 percent of the
proceeds was a stock repurchase program, but due to the size of
the buyback, it would trip a change of control, which would
affect its tax status.
The company said it is considering several other options,
including privately negotiated transactions and a dividend.
It intends to return all of the proceeds from the patent sale
by the end of 2012.
The Dutch auction also includes about $40 million remaining
from an initial $250 million stock repurchase program authorized
in August 2011.