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Tyco to rescue AMP
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November 23, 1998: 8:53 a.m. ET
White knight bid could top $11.3B, fend off AlliedSignal interest
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NEW YORK (CNNfn) - Industrial acquisitions dynamo Tyco International Ltd. said Monday it intends to buy AMP Inc. for at least $11.3 billion, fending off a protracted hostile AMP takeover attempt from AlliedSignal Inc.
Tyco will swap 0.7839 of a Tyco share for every AMP share outstanding if Tyco is trading at 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.
Electrical component supplier AMP has been fending off an unwelcome takeover attempt by AlliedSignal for the last four months, but did not give up hope of remaining independent until a recent court decision gave AlliedSignal the green light for a $10 billion mail-in proxy bid.
Hamilton, Bermuda-based Tyco, a diversified manufacturing and service company, has been on a buying spree in recent months, paying more than $6.3 billion for companies including U.S. Surgical Corp. and, most recently, medical supplier Graphic Control.
"We are bringing to Tyco, by far, the world's largest electronics connector company with an exceptionally strong market position and the most respected brand name in the industry," said Tyco Chairman and CEO L. Dennis Kozlowski.
"The combination with Tyco provides AMP a clear path to becoming the lowest cost manufacturer, while providing attractive margin improvement resulting in double-digit earnings growth and strong cash flows for the foreseeable future."
AlliedSignal spokespeople were unavailable for immediate comment.
As part of the merger, AMP rescinded its $165 million repurchasing initiative as well as its plan to issue an additional 25 million shares to fund defense efforts.
The companies expect the deal to close in the first quarter of 1999.
On Friday, AMP (AMP) closed unchanged at 45-1/8 while Tyco (TYC) shed 1-15/16 to 65-1/16. AlliedSignal (ALD) ended up 5/8 at 41-13/16. 
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