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AMP re-rejects buyout bid
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September 18, 1998: 7:10 p.m. ET
Board unanimously rebuffs revised AlliedSignal offer for 18 % of stock
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NEW YORK (CNNfn) - AMP Inc. once again rejected AlliedSignal Inc.'s revised takeover bid Friday, calling the offer inadequate and not in the best interest of AMP's shareholders.
AMP, a Harrisburg, Pa.-based supplier of electrical connectors, said its board unanimously rejected AlliedSignal's revised proposal to acquire 18 percent of the company.
AMP originally rejected AlliedSignal's $10 billion bid last month. At that time, the $44.50-per-share offer for all 220 million AMP shares represented a 55-percent premium over AMP's stock price.
On Monday, AlliedSignal revised its offer, proposing to acquire 40 million AMP shares, or 18 percent of the company, at $44.50 a share. AlliedSignal made the offer to avoid triggering AMP's poison pill defense. The company also said AMP's shareholders had tendered 72 percent of the company's shares to AlliedSignal.
AMP's shareholder rights plan, implemented before AlliedSignal's offer, had made it much more expensive for a company to buy more stock in AMP after acquiring 20 percent of its shares.
Along with rejecting AlliedSignal's revised bid Friday, AMP revised its poison-pill defense by cutting the threshold of protection to 10 percent of its stock, preventing AlliedSignal from acquiring the 18 percent it now seeks.
"AlliedSignal apparently believed it found a way to attempt to lock up a significant minority position in AMP at an inadequate price," said Robert Ripp, AMP chairman and chief executive. "It is not AMP's strategy to sell the company. We have been quite clear about this. "
AMP said it expects to announce "action designed to enhance value to AMP shareholders" in the near term.
For its part, AlliedSignal will continue to fight "through all available means" for AMP, company chairman Lawrence Bossidy said.
"We continue to believe that shareholders are entitled to make the decision for themselves whether to accept our offer," he said.
AMP (AMP) shares closed Friday at 40-13/16, off 1/4. AlliedSignal (ALD) shares slipped 5/16 to 35-3/4. 
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