You've Got Buyout: Verizon To Purchase AOL For $4.4 Billion
Shares of AOL, Inc. (NYSE: AOL) are trading up more than 18 percent in pre-market action Tuesday on the heels of a somewhat-surprising deal with one of the titans of telecom, Verizon Communications Inc. (NYSE: VZ).
AOL's stock price was trading just over the $50 per share offered by Verizon, last at $50.25 in the pre-market session. Verizon shares have traded down to a pre-market low of $48.70; buyers have stepped in and shares are last trading at $49.32.
The $4.4 billion deal will further drive Verizon's "LTE wireless video and OTT (over-the-top video) strategy," according to the press release issued at around 7 a.m. EDT by Verizon. The release also highlighted AOL's "key assets" including "its subscription business; its premium portfolio of global content brands, including The Huffington Post, TechCrunch, Engadget, MAKERS and AOL.com, as well as its millennial-focused OTT, Emmy-nominated original video content; and its programmatic advertising platforms."
Minutes after the release, AOL Chair and CEO Tim Armstrong appeared on CNBC's Squawk Box. The executive classified his company's suitor as "one of our biggest and best partners," and also touted "there's no better partner to go forward with than Verizon." When Squawk Box's Joe Kernan asked Armstrong "why sell today?" Armstrong responded, "It's not about selling today... it's about the next five years with Verizon."
Armstrong will continue to lead the operations of AOL following the closing of the deal.
Shares of AOL closed Monday at $42.59.
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