FOCUS-Lockheed says no luck in Loral sales
Tuesday September 7, 5:26 pm Eastern Time
(Adds background paragraphs 8 and 11-12)
NEW YORK, Sept 7 (Reuters) - Lockheed Martin said Tuesday it has been unable to
obtain assurances that it can sell its stake in Loral Space & Communications Ltd
(NYSE:LOR - news), one of the things it must to do to complete its acquisition of Comsat
Corp.
Lockheed (NYSE:LMT - news) negotiated the sale of its stake in Loral with the
Department of Justice as part of the requirements for getting antitrust clearance for its purchase of Comsat (NYSE:CQ -
news).
In a filing with the Securities and Exchange Commission, Lockheed said its plans also involved reaching certain agreements
with Loral to assure the sale would be completed in time to get regulatory approval for its Comsat deal.
``The corporation has been unable to obtain these assurances,' Lockheed said in its filing.
Lockheed and Loral did not immediately return calls to their offices Tuesday afternoon.
One analyst said the filing indicates Lockheed could have a harder time winning Hart-Scott-Rodino antitrust approval for its
Comsat purchase.
``There's increased risk that they will not get Hart-Scott approval,' said William Kidd, a satellite analyst at C.E. Unterberg
Towbin.
Kidd said Lockheed holds 45.9 million shares, or 16 percent, of Loral. He said Loral's agreement with Lockheed allows it to
approve Lockheed's divestiture of its Loral shares.
Lockheed, the nation's No. 1 defense contractor, has said that Comsat, a wholesaler of satellite telecommunications services
to telephone companies such as AT&T (NYSE:T - news) and MCI WorldCom Inc. (Nasdaq:WCOM - news), is key in
growing its newly created global telecommunications unit.
The deal, valued at $2.2 billion, faces a number of obstacles, despite winning approval from Comsat shareholders last month.
Besides antitrust approval, the company needs approval from the Federal Communications Commission and an act of
Congress that would change existing satellite legislation that prohibits a private company from owning more than 10 percent of
Comsat.
Lockheed and Comsat have until September 18 to complete the first part of the acquisition -- a tender for 49 percent of
Comsat for $45.50 a share in cash. If they do not complete the first phase by the 18th, the partners can extend the tender or
walk away from the deal.
Lockheed shares closed down 1-5/8 at 35 on Tuesday and shares of Comsat Corp. were down 1-1/2 at 33-3/4.
More Quotes
and News:
AT&T Corp (NYSE:T - news)
Comsat Corp (NYSE:CQ - news)
Lockheed Martin Corp (NYSE:LMT - news)
Loral Space & Communications Ltd (NYSE:LOR - news)
MCI WorldCom Inc (Nasdaq:WCOM - news)
Related News Categories: options, US Market News
Help
Copyright ¸ 1999 Reuters Limited. |
