L-3 Communications Officially Put Up for Sale

Scarcely out of mourning for former CEO Frank Lanza, L-3 Communications (LLL) appears to have officially put up the for-sale sign. You may recall that the shares soared on news of his passing - not because he was considered a bad CEO but because of speculation that the company could be acquired. Since then, the macabre euphoria has worn off, and the shares are trading below the level last seen by Lanza.

Yesterday, however, L-3 filed an 8K with the Securities and Exchange Commission (SEC) detailing its “entry into a material agreement.” The said agreement was forged between the company and several of its senior managers. “Under the Program, executive officers, non-executive officers and other corporate employees will be entitled to severance benefits if their employment is terminated in connection with or following a change in control of the Company.”

In other words, if somebody buys L-3 and fires these managers within two years, the managers will receive a generous severance package.

Now, this could simply be an employee-retention effort on the part of a company that has no plans to be acquired and thus nothing to lose from the agreement.

But coming so closely on the heels of Lanza’s death, we see the agreement as confirmation of the initial speculation that L-3 would be sold to the highest bidder.

LLL 1-yr chart: