The battle over LTV Corp.'s missile and aircraft divisions escalated yesterday when a group headed by Loral Corp. raised its bid for the units and the Carlyle Group filed a $150 million lawsuit against Martin Marietta Corp. for allegedly tampering with its earlier offer.
Loral, which has teamed with Northrop Corp. and Carlyle in an attempt to buy the two LTV units, raised the price of an offer made last week by $30 million, to $475 million.
The new Loral-Carlyle-Northrop offer includes $450 million in cash, $54 million more than Martin Marietta's offer, and $25 million in preferred stock.
Bethesda-based Martin Marietta announced Aug. 3 that it had reached a preliminary agreement with LTV to purchase the units for $440 million. LTV filed for Chapter 11 bankruptcy protection in 1986, and any sale of the units requires court approval.
Although the offer from the Loral group already exceeded Martin Marietta's, a Loral spokeswoman, Elizabeth Allen, said the bid was raised to induce LTV's creditors to take a new look at its offer.
"The creditors said last week they wanted to see a substantial difference" in the Loral and Martin bids, Ms. Allen said. "We have provided them with that substantial difference."
LTV's senior creditor groups and Pension Benefit Guaranty Corp., LTV's largest creditor, now have to review details of the Loral offer and compare them with those in the Martin Marietta package.
The pension corporation, a federal agency that guarantees pension plans of private companies, gave a tentative endorsement to the Martin Marietta offer two weeks ago but cautioned that it might shift its support if a more favorable bid emerged.
Martin Marietta was also the subject of attack yesterday in Arkansas, where the state attorney general asked for a federal investigation into possible antitrust violations related to Martin Marietta's intent to acquire the LTV military units.
On another front, Carlyle announced yesterday that it filed a civil lawsuit against Martin Marietta alleging that Martin interfered with its earlier plan to buy LTV's aircraft division.
The suit, filed in U.S. District Court in Washington, also charges Martin Marietta with making "false and misleading" statements to federal officials about the proposed purchase. Those statements led to a recommendation from officials studying the sale earlier this summer that President Bush block the sale of the LTV units to a group made up of Thomson-CSF, Hughes Aircraft Co. and Carlyle.
Thomson, the world's second-largest defense electronics company, is 58 percent owned by the French government. Thomson later dropped its controversial bid for the LTV missiles unit.
At the time of its alleged misstatements, Martin Marietta was teamed with Lockheed Corp. in a fierce bidding match against the Thomson-Carlyle group for the LTV units.
Martin Marietta said that a Thomson-Carlyle purchase could jeopardize national security by transferring sensitive missile technology to a foreign government.
The court papers allege that Martin Marietta's statements were intended to create the impression that a Thomson-Carlyle acquisition would be contrary to U.S. national security.
Carlyle also charged in its suit that Martin Marietta stated incorrectly that the French government was subsidizing Thomson's effort to purchase the missile division and Carlyle's attempt to acquire the aircraft unit.
Carlyle, a Washington-based investment group, is seeking more than $150 million in compensatory damages, plus punitive damages.
Phillip S. Giaramita, a spokesman for Martin Marietta, said the company considers the charges in the Carlyle suit "unfounded and without merit." He said the company will vigorously defend itself.