General Dynamics Division to Buy Axsys Technologies for $643 Million
General Dynamics Advanced Information Systems, a unit of General Dynamics that specializes in defense systems, will purchase Axsys for $54 per share, which represents a paltry 8% premium over Axsys' Wednesday closing price of $50 per share. The acquisition is expected to close in the third quarter of this year and both companies' boards have already approved the deal. General Dynamics expects the deal to add to its earnings beginning in 2010; its shares fell 43 cents or 0.7%, in morning trading Thursday.
We removed shares of General Dynamics from our "recommended" list back on May 15 when the stock was trading at $55.84. The company has a dividend yield of 2.59% based on last night's closing stock price of $58.59.The stock has technical support in the $48 to $52 price area. If the shares can firm up, we see overhead resistance around the $60 to $63 price levels. We would remain on the sidelines, but we do watch this former recommendation very closely. General Dynamics holds a Dividend.com DARS Rating of 3.4 out of 5 stars.