AMP to Buy Back 30 Million Shares at $55

AMP Inc. said it plans to buy back 30 million shares at $55 each in an effort to fend off AlliedSignal Inc.’s $9.8-billion hostile offer for the world’s largest maker of electronic connectors. The $1.65-billion offer for 14% of its shares outstanding is expected to begin next week. The per-share price is 24% higher than AlliedSignal’s offer of $44.50 made Aug. 4 and 92% higher than its share price before the AlliedSignal offer. Harrisburg, Pa.-based AMP said the buyback is part of its profit improvement plan. AMP has been asking its shareholders to reject AlliedSignal’s bid so that AMP can generate higher earnings on its own. On the New York Stock Exchange, AMP shares fell $2.19 to close at $37, and AlliedSignal shares fell 25 cents to $35.25.