Why Loral Space & Communications Blasted Off

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What: Shares of Loral Space & Communications (Nasdaq: LORL  ) have blasted off, up by as much as 16%, after the company agreed to sell its satellite manufacturing subsidiary.

So what: The company is selling its Space Systems/Loral subsidiary to Canadian rival MacDonald, Dettwiler and Associates for $875 million. The transaction will boost MacDonald Dettwiler's market share in the communications sector and give it more exposure to commercial and government customers.

Now what: Loral said it will also receive cash dividends and various other payments from the subsidiary that should total more than $135 million, and the board is looking at how to return some of those after-tax proceeds to shareholders after the divestiture. MacDonald Dettwiler expects the deal to become accretive to earnings immediately.

Interested in more info on Loral Space & Communications? Add it to your watchlist by clicking here.

Fool contributor Evan Niu holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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9/19/2014 3:59 PM
LORL $73.63 Down -0.51 -0.69%
Loral Space & Comm… CAPS Rating: ****

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