Walt Disney Co., the world’s biggest entertainment company, plans to buy back $6 billion to $8 billion of stock starting next year, stepping up efforts to increase investor returns as capital spending winds down.
Disney will borrow to finance some of the repurchases, Chief Financial Officer Jay Rasulo said Thursday at an investor conference in Beverly Hills, Calif., sponsored by Bank of America Corp. The company intends to maintain its debt ratings, he said.
The buyback comes as spending shrinks from a peak of $3.78 billion in fiscal 2012. In recent years, Disney has expanded parks in California and Florida, built cruise ships and developed a resort in Hawaii. A new destination in Shanghai is scheduled to open at the end of 2015. Disney could repurchase about 6.8 percent of the stock at current prices.
Disney rose 2.4 percent to $65.49 at the close in New York. The stock has gained 32 percent this year.
Disney will continue spending on projects and make acquisitions, Rasulo said, citing as examples Marvel, Lucasfilm and purchases in games and international TV networks. The company is interested in acquisitions that increase its distribution capability.
“We want to invest in our businesses either through organic growth initiatives or to grow our company through acquisitions,” Rasulo said.
Disney is a regular buyer of its stock. The company repurchased $800 million of shares in the recently completed third quarter and $3.2 billion for the year to date, Rasulo said on an Aug. 6 conference call.
The company has also increased its dividend, with the 2012 annual payout boosted by 25 percent to 75 cents a share.