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Electronics Production | May 11, 2007

Tyco sued over bond tender offer

The American International Group has filed a bondholders' lawsuit against Tyco International.
The lawsuit, filed yesterday in Federal District Court, New York aims to stop Tyco's planned bond tender offer, saying Tyco was offering a below-contract price for its debt.

“Tyco is able to fully redeem the notes at an already agreed upon price", AIG said in the documents. “However Tyco has chosen not to honor that contractual obligation". Tyco is planning to spin off its electronics and health care divisions into independent companies by the end of June. As part of the this, Tyco said that it would buy back most of its outstanding dollar-denominated public debt to a value of $6.6 billion, and that it also expected a subsidiary, the Tyco International Group, to tender for all of its outstanding euro- and pound-denominated debt, worth about $1.9 billion.

AIG's view is that coercive tender offers, like the Tyco offer, are plainly inappropriate. According to AIG Tyco has left AIG with no choice but to oppose the course of tender and demand the full redemption payment that is owed to AIG and to its clients.

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