NEW YORK (AP) — AOL Inc. said Monday that it will buy back about $600 million in its common stock through an accelerated repurchase program and declared a special dividend of $5.15.
The New York-based Internet company said the moves are part of a plan to return $1.1 billion to the company's shareholders.
AOL shares rose $1.53, or 4.7 percent, to $34.45 in premarket trading.
The stock will be bought back through an accelerated stock repurchase agreement with Barclays Bank PLC using a previous stock buyback authorization and an incremental $10 million approved by the company on Sunday.
AOL will pay the $600 million at the beginning of the agreement and expects to receive most of the shares before the end of the year, including about 4 million shares that Barclays will deliver to AOL on Thursday.
The exact number of shares AOL will ultimately buy back will be based on a discount to the volume-weighted average share price of AOL common stock during the agreement period minus $5.15 for the payment of the special dividend, the company said.
Both moves are designed to boost value for the company's shareholders, AOL said.