To start the week, Northrop Grumman (NOC) announced an agreement to purchase Orbital ATK (OA). The news isn't a surprise considering the ongoing missile concerns surrounding North Korea, but one needs to ask: why do a deal now far above decade-long highs?
My investment thesis turned more negative on Northrop Grumman over the last year, especially as the stock jumped on North Korea missile threats and associated yields plunged. If the company doesn't want to purchase its own stock anymore, should investors see value here?
Northrop Grumman agreed to pay $134.50 per share of Orbital ATK in cash that amounts to $7.8 billion. The offer price provided a 23% premium over the closing price from last week.
