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Lockheed Martin drops bid for Terran Orbital

May 3, 2024

By Chris Forrester

Aerospace giant Lockheed Martin (LM), already a major shareholder in satellite builder Terran Orbital, has abandoned its contested bid to take control of the company.

LM had offered around $500 million (€465.4m) for the shares – at $1 per share – it did not already own, but in a SEC filing made after the markets closed on May 2nd it confirmed that it had withdrawn its bid.

“While we have decided not to pursue our offer to purchase Terran Orbital, we will continue our work together on multiple customer missions that support the US and its allies,” Lockheed Martin stated, adding that it was committed to supporting Terran Orbital.

Terran, in response to LM’s bid, had restructured its shareholding into a rights plan, often called a ‘poison pill’ defence against what are seen as hostile takeovers. LM is both a shareholder and also a customer of Terran.

Terran, in  statement, said that it was continuing with what it described as a “strategic review” of its business.

However, Terran’s largest customer is Rivada Space Networks which has an initial order for 300 satellites to be built, and options for an extra 300. In its latest accounts Terran showed that Rivada had paid $6.9 million in its first stage payments for what is a contract worth $2.4 billion.

Terran’s share price tumbled in after-hours trading from $1.29 to – at one point to just 99 cents/share – although recovered slightly to $1.08.

Tim Farrar, an industry consultant at TMF Associates, said bluntly that “unless Rivada shows up with some money soon, a Lockheed purchase out of bankruptcy might be cheaper and less controversial.”

At the March Satellite 2024 event in Washington DC, Terran’s CEO Marc Bell, speaking on a conference platform with Rivada’s CEO Declan Ganley alongside him, stressed that Rivada was up-to-date on all invoice payments.

Terran Orbital ended 2023 with $71.7 million in cash on hand. In Q4 2023 Terran Orbital brought in $31.6 million in revenue and reported a net loss of $42.8 million.

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