DRS rejects L-3 offer
- By Roseanne Gerin
- Jul 01, 2004
Defense electronics maker DRS Technologies Inc. has rejected an acquisition proposal it received last month from L-3 Communications Corp., the company said today.
DRS' board of directors unanimously rejected the proposal after deciding a merger was not in the best interest of the company's shareholders. L-3 offered to pay $42 a share for DRS in a cash deal. DRS' shares were trading at $39.16 at 3 p.m. today on the New York Stock Exchange.
DRS does not intend to make further public comments on the matter, the company said in a statement.
L-3 is interested in DRS because the two companies frequently run up against each other in the merger and acquisition arena as well as in competitions for federal defense contracts, said Jon Kutler, chairman, chief executive and founder of Jeffries Quarterdeck, a Los Angeles-based merger and acquisition firm for defense IT companies. Jeffries Quarterdeck has done business with both companies on previous deals, but is not currently working for either one, he said.
DRS rejected L-3's buyout attempt because it wants to fully assimilate Integrated Defense Technologies Inc., a Huntsville, Ala. defense electronics company, which DRS bought last year, Kutler said.
Based in Parsippany, N.J., DRS employs 5,800 workers worldwide and had revenue of $1 billion for its fiscal year ended March 31, 2004.