AMP Inc. said today that it would repurchase up to 30 million shares of AMP common stock at $55 a share, $10.50 more than AlliedSignal Inc.'s bid for the company.
The latest shot in the long-running battle between the two companies came as they get set to argue their case in a Federal court in Philadelphia today.
The "self-tender" offer to spend more than $1.6 billion on its stock "gives AMP the ability to deliver value to shareholders today while the company continues
to take the necessary steps to increase value for tomorrow," said Robert Ripp, chairman and chief executive of AMP, Harrisburg, Pa., who has called AlliedSignal's bid for the company a "low-ball offer."
AMP's stock rose $1.25, to $40.43, in early trading this morning.
AMP has lined up more than $3.5 billion in financing for the proposed repurchase from affiliates of Credit Suisse First Boston, and Donaldson, Lufkin & Jenrette Securities.
AlliedSignal, meanwhile, said in an open letter to AMP employees that, if it succeeds in buying AMP, it would maintain for at least one year the employment of all Pennsylvania AMP employees who earn less than $50,000 a year.
AlliedSignal told the employees the public commitment was designed to clarify "misleading impressions you have received from AMP about AlliedSignal's intentions regarding your job and your benefits."
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