LITTON GETS WARNING SHOT; DEFENSE DEPARTMENT REPORT OPPOSES PURCHASE OF NEWPORT NEWS SHIPYARD.Byline: Gregory J. Wilcox Daily News Staff Writer The Pentagon on Friday torpedoed Litton Industries Named after inventor Charles Litton Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001. Inc.'s proposed $1.9 billion acquisition of Newport News Newport News, independent city (1990 pop. 170,045), SE Va., on the Virginia peninsula, at the mouth of the James River, off Hampton Roads, near Norfolk; inc. 1896. Shipbuilding Inc., saying the potential cost savings to the government are not big enough to justify less competition among shipbuilders. Meeting with reporters in Washington on Friday, Defense Secretary William Cohen For other persons named William Cohen, see William Cohen (disambiguation). William Sebastian Cohen (born 28 August 1940) is an author and American politician from the U.S. state of Maine. said a Litton-Newport News combination would be ``contrary to our interests in maintaining separate facilities'' for naval shipbuilding. And although the government's stance is based on the U.S. Navy's preliminary assessment of the deal, Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. said it is probably the final word on the matter. At the same time, the government indicated it would not object to Litton's proposed $500 million cash acquisition of Avondale Industries Inc., a New Orleans-based builder of amphibious assault Noun 1. amphibious assault - an amphibious operation attacking a land base that is carried out by troops that are landed by naval ships amphibious operation - a military operation by both land and sea forces vessels, support ships for the Navy and commercial ships. That news, coupled with the fact that Litton's offer for Avondale tops an earlier bid from Newport News, indicated to Wall Street that Litton probably will win the bidding for Avondale. Shares of Litton and Avondale increased, while Newport News shares lost 16 percent of their value Friday. Woodland Hills-based Litton took the news in stride Adv. 1. in stride - without losing equilibrium; "she took all his criticism in stride" in good spirits , noting that no formal proposal regarding its offer to Newport News has been submitted to the government. ``We continue to believe the combination of Litton and Newport News and Litton and Avondale are good for the companies, for the stockholders, the employees, the country and the Navy,'' said Litton spokesman Randy Belote. He noted that the department's assessment is still a preliminary one and that there have been ongoing discussions between the company and the government. Litton now plans to revisit re·vis·it tr.v. re·vis·it·ed, re·vis·it·ing, re·vis·its To visit again. n. A second or repeated visit. re the cost savings issue to see whether a satisfactory resolution can be reached. Litton made separate bids for Newport News and Avondale on May 6. The offers came after anti-trust regulators rejected a bid by General Dynamics General Dynamics Corporation (NYSE: GD) is a defense conglomerate formed by mergers and divestitures, and as of 2006 it is the sixth largest defense contractor in the world[1]. The company has changed markedly in the post-Cold War era of defense consolidation. Corp. for Newport News on grounds that potential cost savings to the government did not warrant a reduction in competition. Litton's Ingalls Shipbuilding Ingalls Shipbuilding is a shipyard located in Pascagoula, Mississippi, originally established in 1938, and is now part of Northrop Grumman Ship Systems. It is a leading producer of ships for the US Navy, and at 10,900 employees, the largest private employer in Mississippi. subsidiary builds destroyers and other surface ships and Newport News is the Navy's only builder of nuclear-powered aircraft carriers. Regulators appear troubled that if the companies combine, there would be two, rather than three, contractors for battle-worthy ships. Susan Hansen, a Defense Department spokeswoman, said Friday that the agency has not been asked to send any documentation regarding the merger to the Department of Justice. ``The assessment was based on Litton representing its intentions as opposed to a formal acquisition proposal. But you've got one `go' and one `no go' here,'' she said. At the time the deal was announced some analysts thought Litton's offer stood a better chance of passing regulatory muster TO MUSTER, mar. law. By this term is understood to collect together and exhibit soldiers and their arms; it also signifies to employ recruits and put their names down in a book to enroll them. than did General Dynamics' bid. Officials at Newport News, based in Newport News, Va., took a neutral position on the issue Friday. ``It's really up to Litton to try to determine if they want to investigate the concerns that have been expressed,'' said Newport News spokesman Mike Hattfield. Regulators already had approved Newport News' $470 million stock-for-stock merger with Avondale, which continues to evaluate both offers. ``Avondale has made no decision on which of the two offers it would accept but the company is still closely studying both merger proposals,'' said company spokesman Ed Winter. ``There is no timetable or deadline to make such a decision and we can't say when that might occur.'' Shares of Litton increased $2.1875 to $64.9375 Friday on trading volume Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. three times heavier than normal. Newport News lost $5.25, or 16 percent, to close at $27.50 on eight times normal volume. Avondale increased 25 cents to $36.50. |
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