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Military Technology: Take Profits on United Industrial

Posted December 13, 2007

“J. Christoph Amberger recommended United Industrial in his Taipan newsletter a little more than a year ago. And since that initial buy recommendation, we’ve racked up 90% gains in the position.” — Stephanie Grimmett

Baltimore – (TFN) United Industrial (UIC: NYSE) is doing something rather odd.

The unmanned aviation company agreed to a buyout from aircraft producer Textron (TXT: NYSE) a few months ago.

Textron will pay $1.1 billion, or about $81 per share, for the company. But United Industrial has been stalled out waiting for investors to liquidate their shares.

To help the process, UIC is delisting from the New York Stock Exchange.

United Industrial produces the popular Shadow series of unmanned military planes. And it recently won a contract with the U.S. Army to supply its One System remote video terminals (OSRVT), which links the military’s various reconnaissance technologies and allows them to access the same information and communicate with each other.

J. Christoph Amberger recommended United Industrial in his Taipan newsletter a little more than a year ago. And since that initial buy recommendation, we’ve racked up 90% gains in the position.

That number isn’t going to get any better. UIC’s shares have been sitting at or near their buyout price since the merger was announced in early October.

I assumed that, like most other mergers, Textron would pay out its promised $81 per share to the company’s stockholders, taking United Industrial private.

But United Industrial has something else in mind. It announced plans to submit a delisting notice to the Securities Exchange Commission on December 21. The stock will trade for 10 days after the filing, assuming the merger hasn’t gone through by that point.

In other words United Industrial wants you to sell, sell, sell. So that it can do the same.

Sell your shares of United Industrial (UIC: NYSE) at market price.

If you can’t get them sold before the company delists, don’t worry. United Industrial has promised that shares can be sold on the OTC until the merger goes through.

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Posted by Stephanie Grimmett · Filed Under US Stocks and Markets 

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