- The Washington Times - Thursday, March 14, 2002

CLEVELAND (AP) The TRW Inc. board yesterday rejected Northrop Grumman Corp.'s unsolicited $5.9 billion buyout offer for a second time and said it plans to spin off its automotive-parts business within nine months.
TRW, which is also a major defense manufacturer, said it has also begun preliminary talks with others who have expressed interest in buying all or part of the automotive business and its aeronautical-systems business.
The Northrop offer of $47 per share in Northrop stock is "grossly inadequate" and not in the best interests of TRW's shareholders, the TRW board said in a statement.
The board urged shareholders to reject Northrop's tender offer.
TRW directors rejected North-rop's initial offer 10 days ago and said Northop's subsequent tender offer contains conditions that could result in a price of less than $47 for each share of TRW stock.
The company said it has been exploring other transactions to create more value for its shareholders and reduce its heavy debt load.
TRW's automotive business accounts for 64 percents of the company's sales and 58 percent of profit.
"Since this offer is subject to a collar, which could result in a price of less than $47 per share, this offer is less favorable than Northrop Grumman's earlier proposal," Mr. Odeen said.
TRW also said that on March 6 it received notice that TRC Capital Corp., based in Toronto, began its own unsolicited offer to purchase up to 4.25 million TRW common shares, or approximately 3.4 percent of TRW total common shares outstanding, at a price of $50 per share in cash.
The TRW board yesterday recommended that its shareholders reject the TRC Capital offer.
Northrop Grumman, a Los Angeles-based defense contractor that owns the shipyard in Newport News, Va., notified federal regulators Monday of its plans to move ahead with a $5.9 billion hostile takeover of TRW.
Mr. Odeen described Northrop Grumman's takeover attempt as "an opportunistic attempt to acquire TRW's premier franchise."
"In particular, the current planned increases in government defense spending are expected to benefit many technologies and arenas where TRW's space, electronics and systems businesses are a leader," he said.


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