TRW shareholders urged to reject Northrop Grumman proposals

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Posted 8:45AM on Tuesday, March 26, 2002

CLEVELAND - TRW Inc. directors on Monday recommended that shareholders vote down two proposals that Northrop Grumman Corp. plans to make at TRW's annual meeting next month to advance an unsolicited $5.9 billion takeover bid. On March 18, Los Angeles-based Northrop called for Cleveland-based TRW to set up a committee of independent directors to consider its $47-a-share bid and to provide access to key financial information. Northrop said in its filing with the Securities and Exchange Commission that it's willing to engage in discussions with TRW "including evaluating a potential increase in the proposed consideration if TRW provides nonpublic information which warrants such an increase." According to the TRW board, the Northrop proposals seek confidential information from TRW although its bid is considered to be undervalued and would limit the number of TRW directors who can take actions regarding Northrop Grumman's proposal. Messages were left Monday for Northrop representatives in Los Angeles and Cleveland. "We believe that Northrop Grumman's proposals are both unnecessary and self-serving and are part of their ongoing effort to force TRW shareholders to accept its below-market $47 per share offer," said Philip A. Odeen, TRW chairman. The TRW board's view remains unchanged that the Northrop Grumman offer is not in the best interests of shareholders. "In light of this, providing confidential, business-sensitive information to Northrop Grumman simply makes no sense," Odeen said. Odeen noted that 11 of TRW's 13 directors are independent. He also said the board prefers its previously announced debt reduction program and selling its automotive parts business. "Clearly, if Northrop Grumman is allowed to buy TRW's premier assets at a bargain price, it is Northrop Grumman shareholders who benefit," he said. TRW is a defense contractor focused on aerospace systems, an automotive parts producer focused on air bags, seat belts and sensors, and a provider of information technology services. In trading on the New York Stock Exchange, TRW shares fell 20 cents to $51.15 each while Northrop shares fell $1.12 to $108.00.