July 27, 2009 / 10:02 PM / 9 years ago

UPDATE 3-Time Warner buys Google's stake in AOL for $283 mln

* Stake sale values AOL at about $5.7 billion

* Time Warner bought stake from Google on July 8 (Adds analyst comments, details on original Google deal)

NEW YORK, July 27 (Reuters) - Time Warner Inc TWX.N paid $283 million for Google Inc’s (GOOG.O) 5 percent stake in AOL, the Internet company said in a U.S. regulatory filing on Monday.

Time Warner, which plans to spin off AOL by the end of the year, bought the stake from Google on July 8, AOL said in the filing with the U.S. Securities and Exchange Commission.

The price that the company paid for Google’s stake implies that AOL has a total value of about $5.7 billion.

The filing is a registration statement with the government that AOL must file before its long-expected separation from Time Warner, and brings the company one step closer to ending a troublesome eight-year-old merger.

Brigantine Advisors analyst Colin Gillis said the implied $5.7 billion AOL valuation from purchasing Google’s stake represents a “floor valuation” as AOL moves towards a spinoff.

“It shouldn’t be anything lower than that,” said Gillis.

Current Time Warner shareholders are expected to be holders of the new AOL shares once the company is separated.

AOL Chief Executive Tim Armstrong told Reuters last week the company will focus primarily on being a Web advertising business.

In its registration statement, AOL said that it expects to incur up to about $90 million of additional restructuring charges in the last nine months of 2009.

The company already incurred $58.3 million in restructuring charges during the first quarter of 2009, which it said were related primarily to layoffs and closing facilities.

Google, the number search engine in the U.S., purchased its 5 percent stake in AOL in December 2005 as part of a five-year advertising partnership between the two companies.

Time Warner shares rose 2 cents to close at $27.60 on the New York Stock Exchange. Google shares fell $1.92 to close at $444.80 on the Nasdaq stock market. (Reporting by Robert MacMillan, Yinka Adegoke and Alexei Oreskovic; editing by Carol Bishopric, Leslie Gevirtz)

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