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Tyco announces $1 billion buyback

NEW YORK (Bloomberg) — Tyco International, the world's largest maker of security systems through its ADT unit, raised its quarterly dividend 36 percent and authorized a $1 billion share buyback program.

The dividend will increase to 15 cents a share from the 11 cents it previously expected to pay following the spinoff of two units, Bermuda-based Tyco said in a statement.

Shareholders of record as of October 1 will be eligible for the payout, which will be made November 1.

Tyco's board approved the share repurchase about five weeks after Chief Executive Officer Ed Breen said the company would review its use of cash.

Tyco had $1.31bn in cash on hand as of June 29, which was the day Tyco spun off health-care company Covidien and electrical components-maker Tyco Electronics.

"Returning cash to shareholders is a top priority for management," wrote Stephen Tusa, an analyst with J.P. Morgan Securities in New York. He has an "overweight" rating on the stock and doesn't own any.

The $1bn repurchase program, at today's closing price, would represent 22.9 million shares, or 4.6 percent of the 497.1m shares outstanding as of August 2. The company has repurchased $2bn worth of shares since May 2006.

Tyco rose 84 cents, or two percent, to $43.58 late yesteryday in New York Stock Exchange composite trading. The stock has gained 4.5 percent in the past year.