DALLAS -- Loral Corp., a leading military electronics concern, said yesterday that it had agreed to join with Thomson CSF of France in a radically altered bid by Thomson to acquire the
missile unit of LTV Corp. for a combined $250 million.
Thomson withdrew its $300 million offer for the missile unit earlier this month after the Bush administration indicated it would reject the bid because of worries that the French government, a majority owner of Thomson, might obtain U.S. military secrets.
Loral, based in New York City, said in a statement that it would own a 90 percent stake in the LTV missile unit by investing $230 million in a combined bid with Thomson.
Thomson would contribute about $30 million for the remaining 10 percent, but would not have a seat on the missile unit's board or any role in management, according to Loral. Bernard Schwartz, chairman and chief executive of Loral, said the company could easily raise the money to complete the purchase. Loral's sales last year were $2.8 billion.
The LTV missiles division is a supplier for the multiple launching rocket system and the Army's tactical missile system. It also participates in development work on the space station and the space shuttle for NASA.
Thomson must pay $20 million to LTV if it does not complete a deal to acquire the missiles unit by next Friday. The Thomson bid was chosen over a competing offer by Martin Marietta and Lockheed on April 22 by Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan.
That offer was part of a larger deal in which the Carlyle Group and Northrop Corp. agreed to buy LTV's aerospace unit. Together, the offers for the missiles and aerospace divisions amounted to $450 million.
The Carlyle-Northrop bid was never disputed by the government because both companies are U.S.-owned, but LTV retained an option not to accept the Carlyle-Northrop offer if the Thomson bid failed.
Jerry Dalton, a spokesman for LTV in Dallas, said it was unclear whether LTV would give Thomson more time to obtain government approval and complete other details of its offer with Loral. "Representatives from LTV will meet with those two companies within the next two days to examine the agreement and determine whether or not we can support it. There are a lot of questions with regard to timing, government approval and how this gets delivered to the bankruptcy court."
LTV has been mired in one of the nation's largest corporate bankruptcy reorganizations since July 1986. The sale of the missiles and aerospace units must be completed before LTV can emerge from bankruptcy.
The United Steelworkers Union said yesterday that officers from the union and LTV hoped to get Judge Lifland's approval Aug. 12 for a tentative labor agreement the two sides reached last week.