Northrop Grumman late Sunday announced it was opening its offer of 47 dollars a share directly to the TRW shareholders, just hours after its bid had been formally rejected as too low by the TRW board.

TRW urged its shareholders to hold fast.

"TRW's board of directors will review the Northrop Grumman exchange offer in order to determine the appropriate course, which will serve the best interests of TRW's shareholders," the TRW board said in a statement.

"Shareholders are urged to take no action at this time and await the recommendation of TRW's directors."

The TRW board said it would make its recommendation no later than the close of business on March 15.

In late morning Wall Street trade, TRW shares climbed 78 cents, or 1.56 percent, to 50.83 dollars while Northrop Grumman slipped 3.00 dollars, or 2.78 percent, to 104.75 dollars.

Northrop Grumman had said it would ask the board of Cleveland, Ohio-based TRW to call a special meeting of shareholders -- required under Ohio law -- to authorize its acquisition of TRW shares.

"We are moving ahead to make this offer available to TRW shareholders," said Kent Kresa, chairman and chief executive officer of Northrop Grumman, in a statement.

"We expect that the TRW shareholders will respond favorably," Kresa said. "We continue to believe that such a transaction would be in the best interests of both companies' shareholders."

Northrop maintains that its 47 dollar-per-share offer is 22 percent above the average trading price for TRW stock for the last 12 months and four percent over the highest closing price for the last year.

Combining the two firms would create a giant with sales of approximately 27 billion dollars, excluding TRW's automotive business, to be split off by Northrop if the deal goes through.

The marriage would push Northrop ahead of Lockheed-Martin, which posted 24 billion dollars in revenues last year, in the ranks of defense industry titans.

The merger also would give Northrop access to TRW's coveted laser technology to be used in space-based systems to track and destroy enemy missiles -- technology likely to be expanded by the administration of President George W. Bush.

TRW's board had rejected the Northrop offer as being too cheap.

"After careful consideration, including consultation with independent financial and legal advisors, the TRW board of directors concluded that Northrop Grumman's proposal was financially inadequate," it said in a statement.

The bid "grossly undervalued" TRW's portfolio of technology and market leadership positions in space, defense, information systems and automotive parts, it said.

"This is all about shareholder value and the Northrop Grumman proposal does not begin to recognize the value of TRW's franchise," ," said TRW chairman Philip Odeen.

Odeen and lead TRW director Kenneth Freeman sent a bluntly-worded letter of rejection to Northrop Grumman's Kresa.

"The board views Northrop Grumman's proposal as an opportunistic attempt to acquire one of the industry's leading space and electronics and systems businesses at a time when TRW's stock price was temporarily depressed after the sudden departure of David Cote, our former chairman, president and chief executive officer," the letter said.

TRW's stock had closed at 50.05 dollars a share on Friday, it said.

All rights reserved. � 2002 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

Related Links
TRW
Northrop Grumman
SpaceDaily
Search SpaceDaily
Subscribe To SpaceDaily Express

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only