Forecast cloudy for Lockheed Martin-Titan deal
- By Nick Wakeman
- Apr 01, 2004
Titan Corp. shareholders will vote April 12 on whether to accept Lockheed Martin Corp.'s offer to buy the company, but allegations that Titan made illegal payments to foreign officials could still scuttle the deal.
The allegations that surfaced during Lockheed Martin's due diligence process involved business Titan was doing in the Far East, the African country of Benin, and Saudi Arabia, according to a Titan letter to shareholders mailed today.
In the letter and an accompanying Securities and Exchange Commission filing, San Diego-based Titan said it didn't believe anything found to date would derail the $2.4 billion deal, but if the investigations are not finished by April 12, Lockheed Martin could back out because the conditions of the merger agreement had not been met.
"We continue to work with Lockheed Martin to complete the merger on schedule," said Wil Williams, a Titan spokesman.
The SEC and Justice Department are investigating the allegations of illegal payments to foreign consultants. Titan said that it has set aside $3 million it estimates would be enough to settle charges if the government files any. Officials with Lockheed Martin of Bethesda, Md., and Titan have met with government investigators.
The investigations have focused on three Titan units: Datron World Communications, which operates in the Far East, Titan Wireless activities in Benin, and Titan operations in Saudi Arabia.
Titan has reported Titan Wireless as "discontinued operations" since 2002, according to the SEC document.
After the shareholders' vote, and the deal should be done by April 20. The April 12 meeting could possibly be postponed.
"We want to get through this investigation and complete the reviews" before completing the deal, said Tom Jurkowsky, vice president of communications and public affairs for Lockheed Martin. He declined to comment on the chances of the deal falling apart.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.