L-3 Communications faces new pressure to break up the company after an activist investor group acquired enough shares on 22 June to become the company's largest shareholder.

Relational Investors LLC has proposed the "disposition or spin-off" of underperforming businesses within the company that it believes has reduced L-3's share value, according to a filing with the Securities Exchange Commission by the investor group.

Relational Investors also states in the SEC filing that its recent discussions with L-3 has raised its confidence that the company's "board and management will better address these issues in an effort to increase shareholder value".

Last year, the same investment firm acquired a major stake in ITT shortly before that firm decided to split into three companies.

L-3 was launched in 1996 and capitalised on the consolidation spree of the mid- to late-1990s to grow into a global leader in the defence industry, ranking among the 10 largest US defence contractors.

L-3 chief executive Michael Strianese recently discussed the company's growth strategy in Flight Daily News, noting that the US defence industry has responded to slowing defence spending by spinning off or disposing of low-margin businesses.

Source: Flight Daily News