Unisys Scraps Plan to Spin Off Defense Unit in New Stock Offer

Unisys Corp. said Friday that it has scrapped plans to spin off its defense division through a public stock offering, blaming the turmoil on Wall Street and the uncertain outlook for the defense industry.

The scuttled deal was the largest cancellation of a new stock offering in 20 years. It underscored the dampening effects of last week’s market plunge on this year’s hot market for new issues.

“A sale in a weak market at ‘fire sale’ prices would not serve the best interests of the company and its stockholders,” Unisys Chairman James A. Unruh said.

Unisys said the decision to cancel the offering would not harm its restructuring plan, launched in July to pare debts and shore up its sagging computer business.

In fact, the decision to keep the Paramax Inc. division actually could help because the unit is profitable, Unisys said.

Paramax, based in McLean, Va., makes electronic equipment, radar and specialized computers for ships, airplanes and submarines. It contributed about $2 billion of Unisys’ $10.1 billion in revenue last year.

Unisys announced Sept. 30 that it would sell the subsidiary to the public in a stock offering expected to reap $440 million to $500 million.