AOL Time Warner demonstrates $15bn self belief

The company yesterday announced a two-year programme to buy back $5bn worth of common stock in a move that it said reflected 'its belief in the underlying value of the company and its potential business opportunities moving forward'.

It also gave itself a very loose financial rein by making a $10bn 'shelf registration' with the US financial regulator, the SEC (Securities and Exchange Commission). The move means that no one can say they were misled or surprised if the new conglomerate wheels and deals to the tune of $10bn and eliminates some minor regulatory hurdles.

The filing will allow the company, almost without notice, to raise the cash through bonds, share and warrant issues and to spend the cash as it wants: general corporate purposes, investments, capital expenditures, repayment of debt and acquisitions.

The media giant is also redeeming 23 million preferred trust securities issued by Time Warner for a total of $581m.