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AMP urges restraint
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September 8, 1998: 9:00 a.m. ET
Company asks shareholders not to sell to AlliedSignal; steps up profit plan
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NEW YORK (CNNfn) - AMP Inc. is urging its stockholders not to sell their shares to AlliedSignal and has promised to improve its earnings.
In its latest attempt to fend off a hostile takeover by AlliedSignal, the financially strapped electrical connector maker said it will accelerate its profit improvement plan, with positive results expected in the fourth quarter of this year.
Under the plan, the company expects to generate an operating margin of 13.5 percent in 1999, with earnings per share of at least $2.30. AMP anticipates an operating margin of 16.5 percent in 2000, with earnings per share of at least $3.00.
AMP rejected Morris Township, N.J.-based AlliedSignal's $10 billion takeover bid in August. At the time, the $44.50 per share offer represented a 55 percent premium over AMP's trading price.
In a letter to the shareholders released Tuesday, the company's Chairman and Chief Executive Robert Ripp called the bid "inadequate" and "opportunistic."
Ripp said AlliedSignal is attempting to take over AMP's board because it currently doesn't own enough shares to complete the takeover.
"AlliedSignal owns only 100 shares of AMP stock and currently cannot complete its tender offer until November 1999," Ripp wrote.
Ripp accused the high tech manufacturing firm of attempting to "pack" AMP's board with directors who would have "irreconcilable conflicts of interest."
Although protected by Pennsylvania's tough anti-takeover laws, Harrisburg, Pa.-based AMP is considered vulnerable because its stock price has been battered in recent months by earnings disappointments tied to exposure in volatile Asian markets.
Shares of AlliedSignal (ALD) gained 1 to 34 on the New York Stock Exchange Friday while shares of AMP (AMP) were unchanged at 37-1/4 on the Big Board. 
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