RS and all,
This is the real reason for LOR's price decline. LMT will not make too much capital gain as you indicated on your previous post. I am in to buy more later.
Thursday March 9, 7:57 pm Eastern Time
Lockheed Martin allowed to sell Loral Space stake
NEW YORK, March 9 (Reuters) - Lockheed Martin Corp. (NYSE:LMT - news) has reached an agreement with Loral Space & Communications Ltd. (NYSE:LOR - news) allowing it to sell its 13.5 percent stake in the satellite maker, according to a regulatory filing by Lockheed.
The stake is worth about $600 million, based on a conversion from preferred to common stock and Loral's 13-1/16 closing price Thursday on the New York Stock Exchange.
Such a move would not be totally unexpected, since regulators originally insisted that Lockheed, the No. 1 U.S. defense contractor, divest the stake in order to complete the first step of its acquisition of Comsat Corp. (NYSE:CQ - news).
Lockheed completed the first phase of that acquisition In September 1999, buying 49 percent of Comsat after regulators allowed the deal despite Lockheed's failure to divest the stake in Loral, a Comsat competitor, as they had asked.
Lockheed was unable at the time to get Loral to agree to a deal allowing it to sell the shares. But in February, according to Thursday's filing, the companies reached such an agreement. Lockheed will be able to sell the shares no earlier than mid-May 2000, according to the filing.
The stake is currently in the form of convertible preferred stock, but both companies filed notices with the Federal Trade Commission and the Justice Department to allow Lockheed to convert the 45.9 million shares into an equal number of common shares.
Lockheed will be able to convert the shares on March 5, unless either agency requests additional information.
A Lockheed spokesman declined to specify the reason the company wants to sell its interest in Loral at this point.
For Lockheed to buy the remainder of Comsat, Lockheed needs Congress to amend the 1962 Communications Satellite Act, which established Comsat and prohibited a takeover of the company. Legislators on Feb. 17 reached an agreement on legislation that would allow Lockheed to complete the $2.7 billion deal.
Brian H. |
