Northrop Extends Offer for TRW
May. 06, 2002
%mlink(STRY:; PHOTO:; AUDIO:%)
CLEVELAND (AP) _ Defense contractor Northrop Grumman Corp. extended its $6.7 billion hostile takeover bid for TRW Inc. on Monday after entering a confidentiality agreement to look at the defense, aerospace and auto parts company's books.
The agreement with TRW will allow Northrop to receive nonpublic information about the company. Northrop previously complained that TRW set unacceptable limits for getting such a look at the TRW financial records.
``We are pleased that we have reached a mutually acceptable agreement with Northrop and that it has chosen to participate in the process our board has established to deliver to TRW shareholders the value they deserve,'' said Philip Odeen, TRW chairman.
Northrop extended its $53 a share offer, which expired Friday, until May 17.
The decision comes after TRW shareholders voted on Friday to reject a proposal that would have supported Northrop's takeover attempt.
Under Ohio's antitakeover laws, Northrop cannot buy more than 20 percent of TRW's stock without permission from stockholders of TRW.
Northrop has been trying to go directly to TRW shareholders since the TRW board twice rejected the Los Angeles-based company's bids as inadequate. Northrop vice president Al Myers told shareholders before Friday's vote that approval of the measure was critical in keeping Northrop's takeover attempt alive.
Brett Hoselton, senior automotive analyst for McDonald Investments, said the vote left open the possibility that Northrop can come back with another offer.
TRW makes defense and aerospace equipment and auto parts and is involved in the information technology business. Northrop has said it would sell off TRW's auto parts business.
TRW has proposed its own breakup plan would be worth more than Northrop's current offer.
Northrop has said it could revise its offer, but only after it obtains complete access to TRW's financial records.
On the Net: