Rumours that Richmond-based MacDonald Dettwiler & Associates Ltd. is shopping itself around as a possible acquisition target gave its stock (TSX:MDA) a bump on Wednesday.
Shares jumped nearly 10% before falling back to close up 3.9% at $47.91 on October 20.
Bloomberg reported these rumours earlier in the day, citing “two [unnamed] people with knowledge of the matter.”
Former federal industry minister Jim Prentice blocked the last deal that MDA struck – a $1.3 billion transaction with an American weapons and space contractor in 2008.
Prentice yielded to Canadian public concerns about threats to national sovereignty (See “MDA ignites public debate about Canada’s place in space” – issue 973; June 17-23, 2008).
Buyout funds had allegedly approached MDA in recent weeks about taking it private, while defence and technology companies are reportedly interested in smaller parts of the business, according to Bloomberg’s unnamed sources.
Any sale of space assets to a non-Canadian buyer would require Ottawa’s approval.
MDA issued a statement Wednesday saying it had nothing to disclose at that time.
"As part of its normal practice, MDA continually evaluates strategic alternatives relating to its various businesses to increase shareholder value. Such alternatives may include various merger and acquisition transactions that are considered to be in the best interests of the company. The company is not evaluating a sale of its systems division or any portion thereof."
However, MDA did announce on Thursday it had closed an agreement to sell eleven long-term managed-service contracts for Ł2,900,000. The contracts operate MDA-delivered solutions that deliver back office service for the provision of land and property data to United Kingdom local authorities.
According to the company, the contracts are no longer strategic to MDA’s property information business.