AMP Finds Its White Knight in Tyco

AMP Inc. said it agreed to be bought by industrial conglomerate Tyco International Ltd. for $11.3 billion in stock, topping a $10-billion hostile cash bid from AlliedSignal Inc. The deal valued AMP at $51 per share, compared with the $44.50-per-share cash bid launched by AlliedSignal in August. Harrisburg, Pa.-based AMP had repeatedly rejected the AlliedSignal offer, saying an internal restructuring plan offered more value to shareholders. AMP shares began rising last week on rumors of a “white knight” suitor.

Tyco, whose businesses include electronic security, fire protection systems, underwater telecommunications and medical products, did not express any initial interest in AMP when AlliedSignal made its bid. The companies began talking a few weeks ago, Tyco Chief Executive Dennis Kozlowski said.

AlliedSignal had no immediate comment on the rival offer.

The pact calls for AMP shareholders to receive 0.7839 of a Tyco share for each AMP share. Tyco said the transaction will add 12 cents a share to fiscal 1999 results. The deal is expected to boost earnings by 35 cents to 40 cents a share in fiscal 2000 and another 50 cents to 60 cents in fiscal 2001.