Directors of MediaOne Group approved a 25 million share repurchase program Friday as the barely born company has already become the subject of takeover talk.
MediaOne’s repurchase program, which carries a $1.2 billion value at current share prices, “reflects our confidence in our future,” said Chuck Lillis, chairman and CEO of the Englewood, Colo.-based company.
The stock may be repurchased during the next three years on the open market, where MediaOne has 609 million shares outstanding, or through privately negotiated transactions.
MediaOne, a June 1998 spin-off from US West Communications Group, began life as the country’s third largest cabler with a revenue base estimated at $6.6 billion from 1997 operations.
The spin-off’s mission, according to Lillis, who has led the entity since its inception as US West Media Group, is to focus on two lines of business: domestic and international broadband cable, and international wireless.
The newborn cabler is already deep into that mission, with 5 million broadband cable customers in U.S. clusters and another 5 million broadband and wireless customers in Europe and Asia.
MediaOne, in present and previous incarnations, has also strung together 11 straight quarters of double-digit growth in cash flow from continuing operations.
The 24% increase for the most recent quarter, announced two weeks ago, raised operating cash flow to $479 million, while sales climbed 12% to $1.7 billion.
The results were good enough to invite speculation that MediaOne could make an irresistible takeover target to a cable group that’s willing to divvy up assets by geographic cluster.