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Loral Space and Communications Ltd. {LOR} ended months of speculation last week about how it would expand its satellite business internationally, announcing that it will pay $490 million in stock to acquire fast-growing Orion Network Systems Inc. {ONSI}.
The news that Orion was ripe for acquisition first was reported exclusively by SATELLITE NEWS (SN, Aug. 18, pp. 1-3). Orion's stock price shot up 27 percent on the news that GE American Communications Inc. {GE}, Loral or another well-established satellite operator was preparing to buy the Rockville, Md.-based company. Sources confirmed that GE was among the bidders for Orion.
Shares in Orion surged to 17 5/8 after last week's transaction was announced, just above the $17.50 per share Loral is paying for Orion. Trading volume topped 1.7 million shares.
At our deadline, Orion's stock was trading at $18.
The acquisition "fits ideally into {Loral Chairman and CEO} Bernard Schwartz's strategy" of building Loral into a global satellite power, said Robert Kaimowitz, an analyst with Unterberg Harris in New York. Loral bought the Skynet fleet of domestic communications satellites from AT&T {T} last year, and also owns satellite maker Space Systems/Loral.
Officials expect the transaction to be complete within four months, after the FCC and Orion shareholders...