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AMP buying war begins
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October 9, 1998: 12:08 p.m. ET
AlliedSignal buys 20M shares of AMP, then AMP buys 30M shares itself
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NEW YORK (CNNfn) - AMP Inc. on Friday began buying back up to 30 million shares of its common stock, the latest tactic by the electrical-connection supplier to ward off a persistent $10 billion hostile takeover attempt by AlliedSignal, Inc.
The repurchase came as a countermeasure to AlliedSignal's purchase earlier today of 20 million shares of AMP's common stock at $44.50 per share.
"AlliedSignal remains committed to a combination with AMP, as demonstrated by its $890 million investment," said Lawrence A. Bossidy, Chairman and Chief Executive Officer of AlliedSignal Inc.
AMP said it too, however, remains committed to going it alone. To prove it, the company bought back its shares at $55 apiece.
"Our self-tender offer will provide AMP shareholders the opportunity to sell a portion of their shares at a price far in excess of AlliedSignal's price of $44.50 per share," said Robert Ripp, AMP's chairman and chief executive officer. "We chose the $55 price because it gives AMP the ability to deliver value to shareholders today while the company continues to take the necessary steps to increase value for tomorrow. The self-tender is our 'down payment' on the inherent value of AMP's Profit Improvement Plan."
AMP's self-tender is scheduled to expire at midnight on Friday, Nov. 20.
The company has been fighting AlliedSignal's hostile takeover attempt since early August.
On Wednesday, the Pennsylvania House of Representatives on Tuesday approved a bill that would stop AlliedSignal from seeking written consent from AMP Inc. shareholders for its $10 billion takeover bid but allow shareholders to consider the offer at a special meeting.
AlliedSignal had hoped to use such a consent solicitation to install its own majority on AMP's board of directors to facilitate a merger between the two companies.
AlliedSignal Chairman and Chief Executive Larry Bossidy said Friday, however, he doesn't expect the judge's ruling to derail the company's plans for a $10 billion takeover of AMP. He further stated on Friday that the company will appeal the decision.
"We think that while there are deep questions of legality in what he said -- and we're appealing -- by and large it doesn't derail us from our intention to move forward,'' Bossidy said.
Shares of AMP (AMP) were up 2-1/16 Friday afternoon at 39-13/16 on the New York Stock Exchange, while AlliedSignal (ALD) shares climbed 1/8 to 34-5/8 on the Big Board. 
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