Terran Orbital [LLAP] on Monday said its board is reviewing a non-binding offer from Lockheed Martin
[LMT] to acquire the satellite company and adopted a shareholder rights plan that gives the company time to consider additional proposals by preventing any investor or group from gaining control of the company.
Lockheed Martin last Friday proposed to acquire Terran—which it already has a stake in—in a bid valued at $606 million, including $223 million in cash that values each outstanding share of stock at $1 each (Defense Daily, March 4). Deal terms also include $313 million to repay Terran’s debt liabilities and $70 million for outstanding warrants.
Terran said that “Consistent with its fiduciary duties,” an independent panel of its directors will evaluate Lockheed Martin’s offer as part of an ongoing review of the company’s strategic alternatives with a goal to maximize shareholder value. Lockheed Martin said its $1 per share offer represents a 38 percent premium to Terran’s 72 cents closing price on Dec. 11, 2023, when it announced it is reviewing its strategic alternatives, and an 11 percent premium to the 30-day, 90 cents per share volume weighted average price as of Feb. 29.
Terran’s stock closed at $1.07 per share last Friday and on Monday at $1.20, up 12 percent.
As for the stockholder rights plan, known as a poison pill defense, Terran said it will be in effect for a year and would be triggered if a person or group acquires at least 15 percent of its shares without the board’s approval. The plans are used to deter hostile takeovers of companies, and in the case of Terran by allowing non-hostile investors to purchase shares at a discounted price.
Terran said its panel reviewing Lockheed’s offer will continue the strategic review to maximize shareholder value. The company also said the panel will not provide any updates unless warranted.