Comarco, Virginia Firm Drop Plans for Merger : Objection: The deal, the second the Anaheim Hills company has canceled in a month, was opposed by a major shareholder.

For the second time in a month, Comarco Inc. has scrapped its plans to merge with another company, the engineering and management services firm said Tuesday.

Officials at Comarco and CACI International in Arlington, Va., said their deal has been canceled because of objections from a major shareholder.

Under terms announced in April, each share of Comarco stock would have been swapped for 1.075 shares in the merged company, while CACI investors would have received one new share for each current share. The deal would have left CACI shareholders with nearly two-thirds of the stock.

Don Bailey, president of Comarco, said the family that founded the Dayton-Hudson retail empire owns about 7.2% of Comarco stock through an investment company.

“They didn’t like the deal because they felt our wireless communications business is valuable, and they didn’t want their ownership diluted,” Bailey said.

The investment firm blocked the deal, in part by announcing that it wanted to be paid for its shares in cash, a requirement that would have emptied Comarco’s pocketbook, Bailey said.

Mark Matheson, an analyst at investment bank Crowell Weedon & Co. in Los Angeles, said he was not surprised at the shareholder’s objections. He said Comarco would have been producing the majority of profits in the combined company, but CACI shareholders would have held 63% of the stock.

In NASDAQ trading Tuesday, Comarco’s stock rose 25 cents a share to close at $5.75. CACI’s stock fell 6.25 cents a share to close at $4.25.

The companies continue to talk about a merger, according to their joint press release. They said they expect to determine by June 30 whether a deal is possible under different terms, details of which were not specified.

CACI, more than twice the size of Comarco, is a software company that provides services to both government agencies and businesses. The merger would have created a company with $220 million in annual sales and 3,300 employees.

Comarco, based in Anaheim Hills, manages airports and other public facilities and provides defense and telecommunications engineering services.

On May 26, Comarco scrapped its plans to acquire MAR Inc., an engineering company in Rockland, Md. Bailey said the two canceled deals were not related.

“Mergers are very difficult to consummate,” Bailey said. “They’re like fragile children.”