U.S. SEC Sues Over Bogus $13.8 Billion Textron Takeover Bid
The top U.S. securities regulator on Tuesday sued the former head of a now-defunct British company for making a fraudulent bid to buy U.S. aerospace and defense company Textron Inc for about $13.8 billion.
Melville ten Cate, 52, and his Xcalibur Aerospace Ltd, which claimed to produce high-speed unmanned aircraft systems, were "never positioned to make any legitimate offer for Textron," the Securities and Exchange Commission (SEC) said in a complaint filed in Manhattan federal court.
The regulator said ten Cate, a U.S. citizen then living in Europe, made overtures to Textron over nearly two years before placing a Nov. 9, 2020 advertisement in the New York Times offering to buy Textron shares at $60.50 each, a 56% premium.
The SEC also said ten Cate falsely claimed on Xcalibur's website to have lined up $11 billion in financing, and in an interview with SEC staff made false statements about the financing and Xcalibur's supposed ability to complete the tender offer.
The defendant could not immediately be reached for comment. The SEC did not immediately respond to a request for additional information.
Textron shares rose as much 15.9% after the offer, which the maker of Beechcraft and Cessna business jets dismissed as "fictitious." The Providence, Rhode Island-based company reported having 228.9 million shares at the time.
Tuesday's lawsuit seeks a civil fine, restrictions on securities transactions, and other remedies against ten Cate. A British court put Xcalibur into liquidation last July, the SEC said.
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