The third largest US media company, Viacom, has announced that it will buy back as much as $8 billion of its shares, topping the list of recent corporates that have opted to return surplus cash to shareholders.
Although US banks had anticipated a buyback from Viacom, which owns CBS and Paramount Pictures, they had not expected the offer to be close to the announced 13% of outstanding shares. Viacom also said it would boost its dividend to shareholders by 16.7%.
Viacom's shares have fallen almost 20% this year, and the company's CEO said it was jumping at the chance to buy shares at an almost unprecedented low. Viacom is also using cash generated by increased profits from the third quarter, which were announced as rising by 12% due to increased advertising on television network CBS and music channel MTV.
The share buyback is the biggest in a long line of corporates returning money to shareholders, with recent examples including Diageo, Alliance Unichem, Telstra and Carnival. Pharmaceutical company Pfizer has also announced it is planning a share buyback of over $5 billion.