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AlliedSignal rethinks bid
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September 24, 1998: 10:34 a.m. ET
Company won't pursue hostile offer for AMP if Pennsylvania hinders it
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NEW YORK (CNNfn) - AlliedSignal Inc. said Thursday it will withdraw its bid for AMP Inc. if Pennsylvania enacts legislation that would impede the company's hostile takeover attempt.
AMP, a Harrisburg, Pa.-based supplier of electrical connectors, is seeking legislation in its home state to block a key element of AlliedSignal's takeover strategy -- winning enough written approvals from shareholders to elect 17 representatives to AMP's board.
But Morris Township, N.J.-based AlliedSignal said it will proceed with its purchase of 9 percent, or 20 million shares, of AMP at $44.50 a share if the law isn't enacted.
A 9-percent stake is sufficient to get a stronghold on the firm without triggering its beefed-up poison-pill takeover defense measure.
Earlier this month, AMP revised its poison-pill defense by cutting the threshold of protection to 10 percent of its stock to prevent AlliedSignal from acquiring the 18 percent it was seeking at the time.
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.
Shares of AlliedSignal (ALD) dropped 9/16 to 35-15/16 on the New York Stock Exchange Thursday morning, while AMP (AMP) stock jumped 1/16 to 39-1/16. 
-- from staff and wire reports
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