Sanders Says Loral Bid Too Low; Stock Soars

Loral Corp. offered Friday to buy Sanders Associates Inc. for about $863 million, but Sanders said the offer from the smaller electronic-warfare equipment company was inadequate.

Both companies make sophisticated electronic gear for the military. Sanders is one-third bigger, with revenue of $886 million in its last fiscal year, compared to $664 million for Loral.

Sanders stock skyrocketed past Loral’s $44-per-share offer, rising to $50.50 a share from $15.75 in consolidated New York Stock Exchange trading. Sanders was the most heavily traded Big Board issue, with more than 6 million shares changing hands.

Loral stock, down most of the day, rose to finish 37 1/2 cents a share higher at $43.25 a share on the Big Board.

Analysts said investors were speculating that another bidder--possibly one of the big aerospace companies--might make a sweeter offer for Sanders than Loral had. Loral itself might become a takeover target, some analysts said.

Loral said its offer would have a value of $44 a share and would consist of about half cash and half Loral equity securities--that is, some kind of stock.

Jack Bowers, Sanders’ chairman and chief executive, said Friday that Loral’s offer did not reflect Sanders’ fair value and said he would recommend that the board reject the proposal.

A rival bid for Sanders might come from a company such as General Dynamics, Boeing or Lockheed, said Gerald Supple, senior analyst for Wheat, First Securities in Richmond, Va.

Those companies all want to get into making electronic warfare equipment because the field is potentially more lucrative than “metal bending.”