By Heather McLean, 8 January 2002 10:20
NEWS AOL Time Warner is buying out Bertelsmann's $6.75bn stake in AOL Europe in an all-cash deal. AOL Time Warner hopes the deal will relax consumer concerns over AOL shares. The company's share price has been volatile in recent months as subscriptions to its internet service have slowed. Bertelsmann is exercising its right to sell its 49.5 per cent ownership of AOL Europe. Although AOL Time Warner was given the option of paying for the stock in shares as well as $2.5bn cash, the company decided it could comfortably absorb an all-cash deal. Analysts said AOL Time Warner's preference for cash stems from its current low share price, minimal debts plus Bertelsmann's decision to sell its entire stake in the company. AOL Time Warner will cough up $5.25bn this January and a further $1.5bn in July.
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