ASSOCIATED PRESS
Lockheed Martin Corp. lowered its buyout offer for Titan Corp. by $200 million to $2.2 billion yesterday as part of a renegotiated agreement that comes as Titan faces an ongoing federal probe into suspected illegal overseas payments.
The new pact calls for Lockheed to pay shareholders of the San Diego-based Titan $20 per share in cash, down from the $22 per share in cash and stock offered when the original deal was struck last year.
That dropped the value of the deal from $2.4 billion to $2.2 billion, according to Lockheed spokesman Tom Jurkowsky.
“We feel the adjusted price is both fair and appropriate under the circumstances,” he said.
Those circumstances are Securities and Exchange Commission and Justice Department investigations of potential bribery related to payments by Titan consultants to foreign officials.
In a March 31 SEC filing, Titan said the probes centered on three business units and subsidiaries in Benin, Saudi Arabia and the Far East.
The filing said Titan and Lockheed presented preliminary findings of internal probes to federal investigators at a March 25 meeting. It did not specify what the internal investigation uncovered.
If charged and found guilty, Titan could face criminal penalties and fines and be blocked from future federal contracts.
Under the new deal with Lockheed, Titan must present written proof that the Justice Department has cleared the company of wrongdoing or plead guilty and be sentenced.
The agreement also pushes back the approval date for a second time. Titan shareholders will now vote on the merger June 7. The vote was scheduled for April 12, a date that had been pushed back from March 16 to give the probes more time to play out.
If the merger is not completed by June 25, both Lockheed and Titan can back out, but the companies said that deadline could be extended to September.
Analysts said Lockheed was using Titan’s legal woes as a way to lower what had previously been an expensive deal for the Bethesda-based company.
Titan spokesman Wil Williams said the company thought the lower price was fair.
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