Digital to Buy Back 8% of Stock

Digital Equipment Corp. on Tuesday announced plans to buy back shares with a current market value of more than $900 million, boosting its stock price as takeover rumors swirled.

Analysts said a takeover bid for the computer company seemed quite unlikely and described the buyback as a step to take advantage of the stock’s bargain price while doing something to benefit its shareholders.

“I don’t think it’s a defensive move by any means,” said Michael Pompian, an analyst in Boston for Needham & Co..

Digital stock rose $2 to $92 in consolidated New York Stock Exchange trading.

Digital said its board had authorized management to buy back up to 10 million of its shares from time to time on the open market. That number represents about 8% of the common stock outstanding. The shares would be bought prevailing market prices.

“We believe buying our stock is an attractive investment and a sound way to build a shareholder value,” James M. Osterhoff, Digital’s vice president for finance, said in a news release.