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Avondale Board Approves Talks With Litton Industries

May 12, 1999|Reuters

Avondale Industries Inc., a Louisiana-based builder of military and commercial ships, said Tuesday its board of directors has approved beginning talks with Woodland Hills-based Litton Industries Inc. regarding Litton's $38-per-share cash offer for Avondale.

In January, Newport News Shipbuilding, which makes nuclear-powered aircraft carriers and submarines for the U.S. Navy, announced plans to buy Avondale in a stock transaction then valued at $470 million. But terms of that agreement allow either side to explore talks with other parties.

Avondale said Tuesday that its board determined that Litton's offer "could lead to a proposal which is superior to the terms of its agreement to merge with Newport News Shipbuilding." Avondale's products include oil tankers and chemical carriers.

Last week, defense contractor Litton offered to buy Avondale and Newport News for a total of $1.7 billion in cash and stock.

Avondale's stock gained 13 cents to close at $36.06 on Nasdaq; Litton slipped $2.25 to close at $60.50 on the New York Stock Exchange. Newport News fell 25 cents to close at $32.06, also on the NYSE.

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