Top US defence contractor Lockheed Martin Corp and Titan Corp on Friday said they had learned of allegations of bribes by Titan consultants, which could jeopardise their proposed merger.
In nearly identical statements, the two companies said the US Justice Department had launched a criminal probe of the alleged payments to foreign officials, possibly opening a door for either side to cancel Lockheed's $1.8 billion buyout of Titan, which makes military communications gear.
A joint review by Lockheed Martin and Titan, as well as a Securities and Exchange Commission investigation and the DOJ inquiry might not be completed by a Titan stockholders meeting to consider the buyout deal on March 16, the companies said.
"If the merger is not completed by March 31, 2004, either Lockheed Martin or Titan may terminate the agreement," the companies said.
As recently as February 13 both companies said they expected the deal would go through.
Bethesda, Maryland-based Lockheed Martin announced plans to buy San Diego-based Titan last September for $22 per share.
Titan shares closed at $20.93 on Friday.
The $1.8 billion purchase price equals Titan's total revenues for 2003. Last September, when the deal was announced, Lockheed was eager to pay that price, plus assume $580 million in Titan debt, to expand its homeland security and intelligence business.
Comments
Comments are closed.