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Technology Stocks : Loral Space & Communications
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To: Valueman who wrote (5071)12/23/1998 11:50:00 AM
From: Rocket Scientist  Read Replies (2) of 10852
 
The story I read from Dow news wire was speculation that the Justice Dept would require LMT to divest its LOR as a condition of approving the Comsat acquisition.

If that's true, and given that transfer and convertabilitiy of LMTs shares are restricted (does anyone have access to the actual covenants?) it may give LOR management an opportunity not unlike the GLP situation where some partners wanted to monetize some of their investment in G*. LOR kindly repurchased the restricted GLP shares, but at a big discount to the (then) market price.

It could do the same thing here with LMT; or taking the thought one step further, how about if LOR agreed to trade some of its G* holdings for LMT's LOR stake plus cash. Some of the cash could be committed to fund G* maybe, some could stay in the LOR coffers, LOR retires the LMT shares and reduces it's exposure to G*. LMT clears it's antitrust problems and gets a stake in G* (which it might like strategically, since it seems it's getting shut out of IRIDIUM next.)

As for Alcatel, doesn't it already own a significant stake in LOR? The present Alcatel includes entities that previously owned 12.5% of SS/L that I believe was converted to the LOR preferred Series C stock.
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