For all the political noise and flagging-waving around Ottawa's move to block the sale of MacDonald Dettwiler and Associates Ltd. space division, there is still a deal to be done here.
That's the only conclusion to reach when it's clear there are still willing participants. Potential buyer Alliant Techsystems has its executives in talks with federal officials, trying to resurrect the $1.3-billion (U.S.) purchase. And given the slump in MDA's stock price since the sale was nixed, the seller still has motivation to move.
With polling numbers showing enormous support for the Conservative's move, no one should expect the politicians to change their minds.
Alternative ideas are required, and the simplest transaction, that doesn't require federal blessing, would see MDA simply spin out the space division as a new company. That long-term option will be explored if Alliant doesn't come back with a better offer.
The focus in coming weeks, however, will be on building a deal that can win Industry Canada's approval. Scotia Capital predicted Monday that there is a 40-per-cent chance of coming up with such a structure.
Alliant needs to address federal concerns and somehow finesse the controversial ownership of the RS-2 satellite data, while scooping up MDA's other space-related divisions for a reduced price.
One blueprint here may be Loral Space and Communications's successful $3.25-billion acquisition of iconic satellite company Telesat. The deal, with BCE as the seller, was done with a healthy dose of capital and structural support from the Public Sector Pension Investment Board, the pension plan for federal civil servants. The public sector pension plans have a way of calming the political waters.
After weighing all the potential outcomes, Scotia Capital put a $46 one-year target price on MDA stock. The company closed Monday at $ 43.89 on the TSX.
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I've Been Everywhere Man from try it again, Canada writes: "and somehow finesse the controversial ownership of the RS-2 satellite data"
that's scary... If you were advising on a take-over of a company where they had a key IP base, would you advise to accept a "finessed" ownership of same. Think of this in the context of the Canadian tax payer who "finessed" the deal to buy data instead of the incremental development of the SAR technology; does said tax payer really want to be fooled twice?- Posted 15/04/08 at 9:18 AM EDT | Alert an Editor | Link to Comment
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alex just a canadian from Canada writes: if we could put our political and ideoligical views aside, Canada needs some serious leadership, public and private in our space program. In my opinion they go hand in hand. We Radarsat, but don't talk about the Anik communication satelites, we contribute robotics to NASA and some ridicule the achievement, others say there is nothing to gain from spending money on programs like this.
And here is where we are at, the quagmire of indifference. Our young will be less enthused on persuing enginering, those that do, many will believe their ownly chance will be out of the country and leave. Not so long ago we were complaining about the brain drain in this country, well we surely are setting it up for another- Posted 15/04/08 at 9:38 AM EDT | Alert an Editor | Link to Comment
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Howard Sienkiewicz from Mississauga, Canada writes: "One blueprint here may be Loral Space and Communications's successful $3.25-billion acquisition of iconic satellite company Telesat. "
Successful how? In turning a profitable company into one that owes more in debt interest each year than it brings in in revenues? In turning a Canadian company into little more than an American front? In laying off whole departments and shutting down whole areas of activity? In destroying the morale of employees so that people are jumping ship at every level? What would it take to call it what it really is -- a disaster for Canada's space and telecom industries?- Posted 15/04/08 at 8:22 PM EDT | Alert an Editor | Link to Comment
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