Comcast is planning to boost its share buyback program by more than 80% if investors approve its $45 billion acquisition of Time Warner Cable, increasing shareholder returns. Comcast will add $2.5 billion to the current plan for $3 billion in 2014 buybacks if shareholders vote for the deal, CFO Michael Angelakis told Bloomberg. “A planned sale of assets to complete the deal may produce cash for even more repurchases,” he said.
TWC suspended its own repurchase program of about $2.5 billion after agreeing to Comcast’s buyout proposal in February. Comcast could increase its repurchases by that same amount if TWC shareholders vote to approve the merger, Angelakis said: “We had a commitment to purchase $3 billion shares of our stock. We’d evaluate whether we’d want to accelerate that plan and increase it above $3 billion, based on the fact that Time Warner Cable had terminated their buyback plan.”
That means Comcast’s share repurchases this year could total $5.5 billion. TWC hasn’t yet set a date for a shareholder vote on the deal.
Comcast has $5.3 billion in cash and equivalents. It has spent between $2 billion and $3 billion purchasing its own stock in each of the past three years, according to its annual regulatory filing.
Comcast may boost its buybacks even further after the merger by using the proceeds of the planned sale of cable systems serving 3 million subscribers, Angelakis said.
The 3 million subscribers would be worth “at least” the $17.6 billion estimated last month by Bloomberg Industries. Comcast is looking to use the “vast majority” of the proceeds from that sale to add to the share buyback plan, Angelakis said.