BRITISH COLUMBIA

U.S. Department of Justice asks MDA for more information on Space Systems bid

09/12/2012 06:36 EDT | Updated 11/12/2012 05:12 EST
RICHMOND, B.C. - The U.S. Department of Justice is asking MacDonald, Dettwiler and Associates Ltd. (TSX: MDA) to shed some more light on its US$875-million takeover bid for California-based Space Systems/Loral Inc.

The satellite technology company based in Richmond, B.C., said Wednesday it has received what is known as a "second request" from the department specifically related to MDA's Montreal satellite communications antenna and payload business.

The request will extend the waiting period imposed by the U.S. Hart-Scott-Rodino Antitrust Improvements Act until 30 days after MDA complies with the request.

"MDA will continue to work closely and co-operatively with the DOJ as it conducts its review of the proposed transaction in order to respond to any questions the DOJ may have," it said in a statement Wednesday.

The deal, which the company called "a game changer'' will boost the Canadian space hardware maker's role as a supplier of commercial communications satellites.

MDA's shares soared 25 per cent on the day the deal was announced in June. But momentum has since dropped off with its stock down nearly 13 per cent from a record high of $61.74 on Aug. 24.

On Wednesday alone, shares fell 6.8 per cent or $3.90 to close at $53.82 and that was before the delay was announced after markets closed.

MDA is best-known as the maker of the robotic arms used on the International Space Station and the now-retired U.S. space shuttles.

The Vancouver-based company had attempted to sell its satellite division several years ago to U.S. defence contractor Alliant Techsystems of Edina, Minn., but was blocked from doing so by the Harper government, which cited national security reasons.

It has also been involved in a variety of businesses that use satellites to collect information from space.