NEW YORK (AP) _ Media company Viacom Inc. said Monday its board has approved a stock buyback program allowing the company that will control its cable networks and the Paramount movie studio once the CBS television business is split off to buy up to $3 billion of its own stock.
The program authorizes Viacom _ which will own MTV Networks, BET, Paramount Pictures, Paramount Home Entertainment and Famous Music _ to buy back its stock once Viacom splits itself into two publicly traded companies, set to occur before year-end.
Viacom's class B shares rose 39 cents to $34.80 in morning trading on the New York Stock Exchange. The less-widely traded class A shares rose 41 cents to $34.83.
Although the split has not been formalized, shares in the two companies started trading on a preliminary basis last week. The other company, called CBS Corp., will house Viacom's more mature CBS television and radio businesses, which are seen as slower growing than the cable and Paramount movie businesses.
Viacom's split-up was engineered by Chairman Sumner Redstone earlier this year, on the belief that Viacom would be worth more as separately managed companies.
The post-split Viacom will finance the stock buyback using existing cash, future cash flows and borrowed funds. Nairi Inc., a closely held entity controlled by Redstone, will also participate in the program, a move aimed at preventing the stock buyback program from bolstering Nairi's stake in the post-split Viacom.