J-W Staff Reports
Residential alarm companies Protection One Inc. and Lifeline Systems Inc. on Thursday announced a mutual agreement to terminate their proposed merger.
In October 1998, Protection One said it would buy Lifeline for about $174 million.
As a result of the cancellation, Protection One, based in Culver City, Calif., said it would take a third-quarter charge of about $2.2 million, or 2 cents a share.
Protection One is a subsidiary of Topeka-based Western Resources Inc. Recently, Western warned that Protection One could default next month on credit agreements. It was unclear whether Thursday's news was connected to that disclosure.
Framingham, Mass.-based Lifeline said it would post a charge to earnings in the third quarter of about $500,000, or 5 cents a share.
Ron Feinstein, Lifeline's chief executive officer, said in a statement that "delays in the regulatory process have made it appropriate for us to refocus our attention on creating shareholder value without this pending merger."
Protection One CEO Jack Mack said the company plans to devote "all of our energy to our core business, divesting noncore assets when appropriate, focusing on customer growth and service."
The companies also announced the termination of the related stock option granted to Protection One by Lifeline in connection with the proposed merger.
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