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Allied backs away from AMP
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November 23, 1998: 6:07 p.m. ET
Company stands down on hostile bid, saying Tyco deal is too high
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NEW YORK (CNNfn) - AlliedSignal backed off from its $10 billion hostile bid for AMP Inc. Monday, saying Tyco International Ltd.'s $11.3 billion white knight charge was too steep.
AlliedSignal Chairman and Chief Executive Officer Lawrence A. Bossidy said the company will pursue its court action regarding the $44.50 a share bid.
"We've always noted that the terms of our $44.50 cash offer for all AMP shares would be flexible in a negotiated transaction," Bossidy said in a news release. "However, at last Friday's price level of Tyco shares, the price being paid by Tyco clearly exceeds the value we place on AMP."
AMP has been stiff-arming AlliedSignal's unwelcome takeover attempt for the last four months. A recent court decision gave AlliedSignal the green light for a $10 billion mail-in proxy bid.
Continuing its recent buying spree, Tyco said Monday it intends to buy AMP for at least $11.3 billion. Tyco will swap 0.7839 of a Tyco share for every AMP share outstanding if Tyco is trading between 60 and 67 during the lead-up period. The ratio could change if Tyco shares fluctuate outside that trading range, but will not exceed a value of $55.95 per AMP share.
Bossidy said AlliedSignal will resume its two-year, $2.2 billion share repurchase plan announced last May. AlliedSignal will also go to the U.S. Court of Appeals to clarify conflict of interest issues that it raised in U.S. District Court.
The company will delay distributing its consent solicitation materials pending this clarification, Bossidy said, and pending verification that AMP shareowners "in fact receive the value indicated in today's Tyco-AMP announcement."
AlliedSignal (ALD) closed up 1 to 42-13/16, while AMP (AMP) was up 3 to 48-1/8 and Tyco (TYC) was up 7/16 to 65-1/2.
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