TRW shareholders effectively blocked a 6.7 billion-dollar hostile takeover bid by defense giant Northrop Grumman Friday, in what TRW hailed as a “clear-cut victory” for its board.

“Shareholders did not believe (Northrop’s) 53 dollar (per share) offer was an adequate price,” TRW chairman Philip Odeen said at a press conference after a preliminary count of the votes.

Northrop chairman Kent Kresa said the California-based military contractor would review its “options” over the weekend, and issue a statement Monday.

Both companies’ shares were down at the close of Friday’s trading, with Northrop Grumman off 1.02 dollars at 122.38, and TRW 80 cents at 55 dollars.

The two companies have been locked in a bitter and highly public battle since Northrop launched its takeover bid in February in a move that would make it the second largest US military contractor behind Lockheed Martin Corp.

TRW, an aerospace and auto parts manufacturer coveted for its anti-missile laser defense technology, has been maneuvering to stay independent, or at worst, spin off parts of the company to prevent the Northrop acquisition.

Northrop could still make a higher offer, forcing another vote; the firm has already raised its offer once, from 6 to 6.7 billion dollars.

TRW’s Odeen suggested Friday that TRW had not completely closed the door on Northrop, saying that officials from the two companies had a “very constructive” discussion late Thursday regarding arrangements for Northrop to review sensitive TRW financial information.

“If Northrop wishes to proceed, I am confident that we can reach a mutually acceptable agreement,” he said.

The two firms have been unable to agree terms for Northrop to conduct due diligence of TRW’s books, even though TRW has signed confidentiality agreements “with several parties” with a view to some type of deal that could involve a sale of parts of TRW or merger.

“The outcome of today’s vote will not ultimately determine the fate of Northrop’s bid for TRW,” said UBS Warburg analyst David Strauss.

Still, Strauss expects Northrop stock to be under selling pressure as the range of options available to management narrows and the likelihood of a more expensive buy-out offer increases.

Strauss has a “hold” rating on Northrop stock, partly due to his concerns about the TRW offer.

Meanwhile, Northrop is looking for legal remedies to the roadblocks in its way.

The firm has filed suit in US federal court to overturn an Ohio statute that provides Ohio-based companies some protection against hostile takeover bids.

Ohio’s Control Share Acquisition Act requires companies mounting hostile takeovers to get shareholder approval before buying more than 20 percent of the stock of an Ohio company.

That was the proposal TRW shareholders voted down in Friday’s special shareholder meeting.

But legal experts suggest Northrop’s legal strategy is a long shot.

“The law has been upheld by Ohio courts four times in the past 14 years, and the US Supreme Court upheld a similar Indiana law in 1987,” noted Michael Ellis, a securities expert with Kahn, Kleinman, Yanowitz and Arnson, in Cleveland.