AlliedSignal Appeal in AMP Bid Fails
In the latest in a series of legal setbacks for AlliedSignal Inc.’s $10-billion hostile bid for AMP Inc., an appellate court Monday refused to overturn a ruling that prevents AlliedSignal from holding a proxy battle for the leading maker of electrical connection devices.
The U.S. 3rd Circuit Court of Appeals denied AlliedSignal’s request for emergency relief from an injunction barring the proxy battle.
Last month, an injunction was handed down in U.S. District Court in Philadelphia that temporarily prevents the Morris Township, N.J.-based manufacturer from proceeding with a proxy fight for control of AMP.
AlliedSignal expected to solicit written consent from AMP shareholders last month for a plan that would expand the Harrisburg, Pa.-based company’s 11-member board to 28 by adding 17 AlliedSignal officers and directors. The new board majority would then be in a position to merge the two companies. The initial scheme envisioned AMP’s larger shareholders submitting written consent by Oct. 23.
But AMP, which has been struggling to remain independent since the hostile $44.50-per-share all-cash offer surfaced in August, won a temporary injunction to block the consent solicitation.
District Judge James Giles issued the injunction Oct. 8 and said it would remain in place until AlliedSignal produced statements from each of its director-nominees attesting that they posed no violation of fiduciary standards established under Pennsylvania law.
AlliedSignal appealed Giles’ ruling and the company said it has since met the requirements of his initial order. But lawyers for AMP maintain that AlliedSignal’s director-nominees would have “irreconcilable conflicts” if elected, because of state statutes requiring directors of Pennsylvania firms to maintain loyalty only to one company.
Giles has set a new hearing date for Wednesday and pledged to reach a final decision on AlliedSignal’s compliance at that time.
The office of the appellate court clerk said Monday that circuit judges had not set a date to hear oral arguments in AlliedSignal’s appeal of the District Court ruling, even though the appeal has been given fast-track status.
Spokespersons for both companies were not immediately available for comment.
