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The Federal Trade Commission authorized a lawsuit Wednesday to prevent Meade International Corp. from acquiring any part of Celestron International Inc., a distressed rival in the market for mid-size telescopes. The action is unusual because Meade has not made an offer for Celestron or filed a Hart-Scott-Rodino Act notice seeking clearance for a deal. “The commission’s proactive action in authorizing staff to seek an injunction to stop the combination of these two companies is in the best interests of consumers and will allow another purchaser to acquire Celestron’s assets and maintain competition in these telescope markets,” said Joe Simons, the director of the bureau of competition at the FTC. The FTC appears concerned that a bankruptcy filing May 28 by the parent of Torrance, Calif.-based Celestron could give Meade an opening to gain market share. It is arguing that any deal would be presumptively illegal because it would give Meade control of the mid-size telescope market, especially for Schmidt-Cassegrain telescopes, which are defined as mid-size telescopes with apertures between 8 inches and 11 inches. The FTC action occurred late Wednesday. Officials at Irving, Calif.-based Meade and at Celestron did not return calls for comment. Celestron is owned by Tasco Worldwide Inc., a privately held Miramar, Fla.-based distributor of telescopes and binoculars. Tasco filed for bankruptcy Tuesday and it plans to liquidate itself by September, the Miami Herald reported Wednesday. This is not the FTC’s first encounter with the two companies. The agency convinced a federal judge in November 1990 to block a proposed joint venture by the companies to combine their telescope operations. Rather than appeal, the companies abandoned the deal and agreed to a settlement barring them for 10 years from acquiring other makers of mid-size telescopes without first seeking FTC consent. That order expired in September. Robert Doyle Jr., a partner at Powell, Goldstein, Frazer & Murphy in Washington, D.C., said the FTC almost never tries to stop a deal before it is unveiled. “This is an extremely unusual suit,” Doyle said. “There must be some strong evidence of Meade’s intent to buy the assets of Celestron and accomplish in a bankruptcy proceeding what they could not accomplish years ago.” The FTC said it has received indications that Meade has a “strong interest” in acquiring Celestron, though it declined to detail this evidence. It also said that an acquisition of Celestron assets might not be subject to the Hart-Scott-Rodino pre-merger notification law. “The Commission action announced today authorizes FTC staff to seek a preliminary injunction and other necessary temporary relief to prevent Meade from purchasing Celestron in whole or in part.” Meade is coming off a tough year. Sales were $94.7 million for the 12 months ending Feb. 28, compared to $123 million a year earlier. It blamed competitive pressure, inventory reductions, and sluggish sales. Meade in October sued Celestron and Tasco for patent infringement. Copyright �2002 TDD, LLC. All rights reserved.

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