Northrop Grumman increases offer for TRW to $6.7 billion

By Joe Milicia The Associated Press
Tuesday April 16, 2002

CLEVELAND (AP) — Defense contractor Northrop Grumman Corp. increased its bid to acquire TRW Inc. to $6.7 billion, a month after the defense manufacturer’s board rejected an unsolicited offer of $5.9 billion. 

Kent Kresa, chairman and CEO of Los Angeles-based Northrop Grumman, said TRW is more valuable because of improving economic conditions. 

The new offer is valued at $53 a share, compared with an original offer of $47 a share. 

TRW late Sunday advised its shareholders to take no action and said its board would review the revised offer. 

Last month, TRW chairman Phillip Odeen told investors that $47 a share wasn’t indicative of TRW’s value. The TRW board also urged shareholders to reject the Northrop Grumman’s hostile tender offer. 

Shares of TRW were up 49 cents to close at $51.97 in trading Friday on the New York Stock Exchange. Northrop shares lost 57 cents to close at $118.31. 

“We strongly encourage TRW shareholders to send a strong message to their board of directors in favor of inviting us to conduct due diligence,” Kresa said in a news release Sunday. “If the TRW board continues to deny us access, this offer will not proceed.” 

In response to the takeover attempt, TRW said last month it plans to spin off its automotive parts business within nine months. 

TRW said it was in preliminary talks with others who have expressed interest in buying all or part of the automotive business and its aeronautical systems business.