Northrop Grumman hikes per-share offer to TRW

Northrop Grumman Corp. of Los Angeles upped its bid April 15 for TRW Inc. to $53 per share, $6 higher than Northrop Grumman offered Feb. 22.

Cleveland-based TRW, which rejected the earlier offer, responded by asking its shareholders to give it time to review the new proposal and make recommendations. The new offer, which is good through midnight May 3, makes for a purchase price of about $6.7 billion.

In keeping with the laws of Ohio, a special meeting of TRW shareholders is scheduled for April 22 to vote on authorizing the acquisition of the company's stock by Northrop Grumman.

"We are increasing our offer for TRW due to improving economic conditions, which drive TRW's end markets, and continuing positive developments in the defense industry," said Kent Kresa, chairman and chief executive officer of Northrop Grumman. "We strongly encourage TRW shareholders to send a strong message to their board of directors in favor of inviting us to conduct due diligence. If the TRW board continues to deny us access, this offer will not proceed."

In response, TRW issued a statement April 14 that said its board of directors will review the revised share offer and make its recommendation to TRW shareholders "in due course."

To counter Northrop Grumman's first offer, TRW announced a restructuring plan that includes spinning off its automotive parts division and paying down its debt.

TRW's stock price has been on a roller coaster since Feb. 19, the day David Cote, chairman, president and chief executive officer, resigned to become president and CEO of Honeywell Inc.

TRW's stock, which closed Feb. 15 at $45.04 per share, dropped to $41.75 the day of Cote's announcement, and fell to $39.80 Feb. 21, the day before Northrop Grumman's offer was announced. It has been trading above $50 since the offer was made.