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(Reuters) - AOL Inc AOL.N said it will buy back $600 million of stock and pay a dividend of $5.15 per share as part of its plan to return shareholders $1 billion that it received by selling patents to Microsoft Corp (MSFT.O).
The company has been aggressively giving back to investors in recent months. It won a bitter proxy battle against activist hedge fund Starboard Value and pledged to give the entire $1 billion patent sale proceeds to shareholders.
The patent sale in April helped AOL swing to a profit for the second quarter from a loss a year earlier.
The deal will see AOL pay Barclays Bank (BARC.L), $600 million up front to execute the repurchase this year, with Barclays to deliver the first four million shares by August 30 (r.reuters.com/rem32t).
The stock was up 2 percent at $33.59 on the New York Stock Exchange on Monday morning.
The buyback plan accelerates a previously approved share repurchase authorization and an incremental $10 million plan authorized on August 26, AOL said.
AOL has 93.9 million shares outstanding, according to Thomson Reuters data.
The special cash dividend will be paid on December 14 to shareholders of record at the close of business on December 5.
AOL has also adopted a Tax Asset Protection Plan to prevent any individual or group from acquiring 4.9 percent or more of its outstanding shares without the board's approval.
Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Joyjeet Das