Terran Orbital saw a significant rise in its shares, exceeding 10% in early trading on Tuesday following the announcement of a $15.2 million contract with the Space Force. This surge in share price far surpassed the buyout bid offered by Lockheed Martin.
Positive Market Response
The Boca Raton-based company’s shares were trading at $1.32, showing an increase of nearly 12%. Lockheed Martin, being a major customer and holding approximately 28% stake in Terran, had recently proposed acquiring the remaining shares at $1 each.
Strategic Moves by Terran
While Terran’s board is currently evaluating Lockheed’s buyout offer, the company has taken proactive steps by introducing a poison pill shareholder rights plan as a safeguarding measure.
Analysts’ Perspective
Analysts at Stifel expressed their opinion that Lockheed’s bid for Terran falls short considering the valuation of competitor York Space Systems, acquired for about $1.1 billion by AE Industrial Partners in late 2022. Stifel suggested that Terran could command a price of at least $4 per share in an acquisition, drawing parallels with the York deal.
Contract Details
Terran announced plans to provide Ambassador class satellite platforms, inclusive of solar arrays and requisite support equipment, to the Air Force Research Laboratory. The delivery of these components is scheduled for the fourth quarter.
