AlliedSignal Makes $10-Billion Hostile Bid for AMP

AlliedSignal Inc. on Monday moved forward with a $10-billion hostile bid for AMP Inc., saying it would immediately acquire an 18% stake in the maker of electrical connectors.

“We’re putting our money where our mouth is,” a spokesman for AlliedSignal said after the company announced it will spend $1.8 billion in cash to buy 40 million shares of AMP at $44.50 per share.

AlliedSignal, which is based in Morris Township, N.J., previously had owned only 100 shares of AMP.

Harrisburg, Pa.-based AMP has rejected the proposed acquisition, contending that a corporate restructuring plan, which calls for job cuts and plant shutdowns, will offer more value to shareholders.

AlliedSignal’s move sent AMP stock up sharply on the New York Stock Exchange, where it gained $3.06 to close at $42.06.

AlliedSignal’s original offer, announced last month, called for the acquisition of all of AMP’s outstanding 220 million shares at the same price. However, it is unable to consummate that offer because AMP’s “poison pill” anti-takeover plan makes it prohibitively expensive for a party to buy more than 20% of the company.

AlliedSignal’s action came after 72% of AMP shareholders tendered their shares in the original offer.

AlliedSignal said the latest offer will expire Sept. 25, after which it will continue its efforts to buy all of AMP’s remaining shares.

. “Today’s results indicate one thing and one thing only--AMP shareholders want value and that’s what we’ll deliver,” AMP Chief Executive Robert Ripp said.

He is expected to announce a share buyback next month.

AMP is considered to be well-protected from the hostile bid because Pennsylvania has tough anti-takeover laws.

Shares of AlliedSignal rose $2.44 to close at $36, also on the NYSE.