The board of directors of AMP, Inc., Harrisburg, Pa., has rejected a hostile-takeover bid of $44.50 per share in cash, or a total of roughly $10 billion, from AlliedSignal, Inc. AMP's board appointed a new chief executive for the company and filed suit to block AlliedSignal from forcing its officers onto the AMP board.
AlliedSignal, Morris Township, N.J., said it will continue to pursue the merger. AlliedSignal commenced a tender offer and filed a consent solicitation with the Securities and Exchange Commission (SEC) seeking to more than double the size of the AMP board of directors by adding 17 AlliedSignal nominees--all directors or employees of AlliedSignal--to the 11-member AMP board to facilitate acceptance of AlliedSignal's offer.
AMP, a maker of electrical and electronic connectors with 1997 sales of $5.6 billion and more than 45,000 employees, has been struggling to reorganize and cut costs lately in the face of increasing global competition. The company has closed plants, reconfigured pricing strategies and furloughed employees in an attempt to reverse its fortunes, according to some analysts.
AlliedSignal, with $14.5 billion in 1997 sales, manufactures and markets aerospace and automotive products, chemicals, fibers, plastics and advanced materials. The acquisition of AMP would bring "a significant new business that will better position us to achieve our objective of consistent earnings growth," said AlliedSignal Chairman and CEO Larry Bossidy in a statement when the company initiated the offer.