TW expanding buyback plan

NEW YORK — Time Warner Inc. increased the size of a stock buyback program it has under way by 20 million shares to a maximum of 35 million shares, the company said Thursday.

Unlike most corporate stock buyback plans, Time Warner’s buyback program is designed to “offset the effects” of future share issues triggered when stock options are exercised.

Time Warner put in place the original 15-million-share program in April of last year and has saved more than $150 million as a result, sources said. The company has repurchased about 14 million shares under the plan at an average price of $42, compared with TW’s closing price Thursday of $60.18, down 31¢.

The rise in TW’s stock price means Time Warner would have had to spend a lot more to supply stock for option exercises, buying on market now, if the company had not repurchased the shares when it did.

Time Warner arranged a loan facility with Chase Securities to fund the original buyback and said Thursday the loan had been “substantially repaid” from money received from option exercises. The entertainment conglomerate is now negotiating to increase the credit line to support the bigger buyback.

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