Major NGA contractors try to buy each other

Updated.

Two of the main imagery contractors to the National Geospatial-Intelligence Agency (NGA) have put in bids to try and buy each other. The bids have failed.

DigitalGlobe and GeoEye have each proffered hostile acquisition bids in the last few days after apparently being in talks over the last few weeks. GeoEye recently had its bid for DigitalGlobe rejected as being “substantially undervalued.” It was worth $792 million.

According to industry watchers, the bids are coming on the back of expected cuts in the Enhanced View contract from the NGA.

Digital Globe’s letter to GeoEye contains language  highly critical of GeoEye, and seems to feel that if there are budget cuts it will be Digital Globe who will emerge safely, not their competitors:

We believe you initiated discussions with us with your unsolicited highly conditional private offer on February 7, 2012 because you were concerned about a disproportionate risk of budget cuts affecting GeoEye. We believe you have mischaracterized subsequent discussions in your May 4 letter as well as during your Friday investor call. In fact, we believe your public description of such discussions in your May 4 letter is materially misleading and incomplete.

Update. GeoEye is “disappointed” in the rejection and will “consider its options.”

One response to “Major NGA contractors try to buy each other

  1. Sojourner Truth

    I think they are all hedging their bets, that the looming defense cutbacks will find many of them redundant, and too expensive. Crafty defense contractors know that fearful Americans will throw money at any perceived threat, but once sanity sets in and the checks come to the table, all of these parasitic neonates will be out of business.

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