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General Dynamics calls off Newport bid
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October 26, 2001: 5:46 p.m. ET
No. 4 U.S. defense contractor ends $2.1B bid after DOJ seeks to block.
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NEW YORK (CNNmoney) - General Dynamics called off its $2.1 billion bid Friday for Newport News Shipbuilding Inc., ending a second attempt to buy its ship building rival.
Falls Church, Va.-based General Dynamics (GD: up $0.91 to $86.00, Research, Estimates) gave no reason for its decision but said its tender offer for Newport shares would expire midnight Friday, Oct. 26.
Earlier this week, the U.S. Department of Justice filed a lawsuit seeking to block General Dynamics Corp.'s bid for Newport News (NNS: down $0.46 to $70.64, Research, Estimates). The Justice Dept. move came after the U.S. Department of Defense said it favored a competing offer from Northrop Grumman Corp. The way is now clear for Northrop to pursue its bid.
In April, General Dynamics, the No. 4 U.S. defense contractor, offered to buy Newport for $67.50 a share in cash. General Dynamics had last offered $38.50 a share in February 1999 for Newport but the Pentagon blocked that deal citing concerns it would leave the nation with only one builder of nuclear ships.
In May, defense contractor Northrop Grumman (NOC: down $0.35 to $103.00, Research, Estimates) made a hostile $2.1 billion takeover bid for Newport News. Northrop's (NOC: down $0.35 to $103.00, Research, Estimates) offer gives Newport shareholders the option to receive $67.50 per share in cash or shares of Northrop common stock. 
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