Friday deadline looms large for Lockheed-Titan deal
- By Roseanne Gerin
- Jun 22, 2004
Titan Corp. cannot guarantee that it will resolve a Justice Department investigation of bribery allegations before Friday, the date set for clearing up the issue before its acquisition by Lockheed Martin Corp. could be completed, the San Diego defense company said yesterday.
Titan said it also could not guarantee that its $2.2 billion merger with Lockheed Martin would not be canceled if a resolution with Justice is not completed by Friday.
The Justice Department and the Securities and Exchange Commission are investigating Titan on allegations that some of its employees made illicit payments to foreign government officials in exchange for business.
Lockheed Martin of Bethesda, Md., announced its intention to buy Titan last September. On June 7, Titan's shareholders overwhelmingly approved a buyout by Lockheed Martin, after a previously scheduled vote was postponed because of the investigations. Both Titan and Lockheed Martin completed their own reviews of the bribery allegations.
According to the companies' revised merger agreement, Lockheed stipulated that by June 25, the Justice Department either must exonerate Titan, or Titan must enter a plea agreement. Lockheed Martin must give its consent to any plea deal.
If Titan does not enter into a plea arrangement on or before Friday, either company can terminate the merger agreement as long as neither has breached its obligations under the agreement.
Titan is also the subject of a few class-action lawsuits. A human rights group filed the most recent one earlier this month, accusing one of the company's contractors in Iraq of conspiring with the U.S. military to abuse Iraqi prisoners.
Some of Titan's own shareholders filed lawsuits against the company earlier this year, accusing executives of hiding the alleged bribes or not preventing them, while others are seeking compensation for the reduction of the value of the company's shares when Lockheed Martin reduced its offer to $20 per share from $22 per share after learning about the bribery allegations.