challenge to the proposed merger of Tyco International Ltd. and ADT Ltd.

clearing the way for the $5.4 billion deal to go ahead, ADT said yesterday.

Western Resources had also bid for Bermuda-based ADT, an electronic security services provider, and accumulated a 27 percent stake in the company as part of a hostile $3.5 billion takeover offer.

ADT said it had been informed by Western Resources that the spurned suitor no longer wished to block ADT's pact with Tyco, a maker of fire protection systems. Previously, Western filed suit in Florida and Bermuda seeking to stop the merger.

ADT with draw its suit in the Bermuda Supreme Court at a hearing yesterday.

The US Securities and Exchange Commission cleared the deal earlier this month.

Western's decision preserves accounting benefits associated with the Kansas-based utility's planned $2 billion acquisition of In a press release, ADT said Western, rather than fighting the Tyco-ADT deal in court, was "seeking its remedy in cash.'' COURTS CTS