Verizon to buy AOL in $4.4 billion deal

Wednesday, 13 May 2015 01:41 - - {{hitsCtrl.values.hits}}

Reuters: Verizon Communications Inc said it would buy AOL Inc in a $ 4.4 billion deal that gives the biggest US wireless carrier access to AOL’s successful digital advertising service and content including the Huffington Post news website.

The offer of $ 50 per share represents a premium of 17.4% to AOL’s Monday close of $ 42.59.

AOL shares traded as high as $ 50.70 before the opening bell on Tuesday. Verizon shares were down about 1% at $ 49.32. The deal, which includes about $ 300 million of AOL debt, will take the form of a tender offer followed by a merger, with AOL becoming a wholly owned subsidiary of Verizon.

Verizon said it expects to fund the transaction from cash on hand and debt. AOL reported a 7.2% rise in first-quarter revenue to $ 625.1 million, boosted by demand for its real-time bidding platform that helps advertisers place video and display ads on other digital properties.

AOL was a technology behemoth in 2000 when it bought Time Warner for more than $ 160 billion. That deal became a disaster and AOL was spun off from Time Warner in 2009 and was listed on the New York Stock Exchange at a value of $ 3.4 billion.

Verizon has been spending aggressively to expand its business. In February it bought licenses worth $ 10.4 billion in a government sale of wireless airwaves for mobile data.

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