HARRISBURG, Pa. -- The Pennsylvania House approved legislation yesterday that may help AlliedSignal Inc. in its $9.8 billion hostile bid for AMP Inc., the world's largest maker of electronic connectors.
A last-minute amendment would allow AlliedSignal to call a special meeting of AMP's shareholders to consider its offer. That conflicts with an AMP proposal -- also passed by the House -- that limits AlliedSignal's ability to take a shareholder vote for a year and could derail the entire legislation.
"AlliedSignal is going to win this battle," said Louis Ehrenkrantz, president of brokerage firm Ehrenkrantz King Nussbaum Inc., which has been tendering its AMP shares. "They're lifting the last barrier to a takeover."
The legislation also included an amendment that effectively ends golden parachutes in Pennsylvania. Under a golden parachute contract, top executives receive large bonuses if their company is sold.
The AMP proposal passed by the House specifies that for 12 months after a hostile bid shareholder action can only be taken at a scheduled meeting and not by written consent.
"The proposed legislation serves the interests of Pennsylvanians and gives AMP the relatively short period of time it has been seeking to demonstrate the positive impact of its profit-improvement plan," said AMP spokesman Guy Read.
Harrisburg-based AMP has been trying to buy time to convince shareholders that its "profit-improvement" plan is better than being bought by Morris Township, N.J.-based AlliedSignal.
AlliedSignal said Tuesday that 155.2 million, or 71 percent, of AMP shares had been submitted under its tender offer as of the close of business. AlliedSignal representatives weren't immediately available for comment yesterday.
AMP shareholders will benefit if the legislation allowing the special shareholder meeting passes or if the entire bill fails to become law.
Democratic Rep. T.J. Rooney said he introduced the amendment that allows a special meeting because the original AMP proposal allowed the government to interfere with the free-market economy.
Pub Date: 10/08/98