Sunter Holdings dropped its bid for Allegheny.

Allegheny International said it terminated a $500-million takeover agreement with Sunter, a First Boston unit that failed to gain a required number of Allegheny’s shares in a tender offer. The Pittsburgh-based consumer products company said Sunter Holdings agreed to drop the merger after Sunter gained less than the required two-thirds of Allegheny’s preferred and preference stock when its tender offer expired late last month. The tender offer attracted 92% of Allegheny’s outstanding common stock, but shareholders tendered only 62% of the preference stock.