NEW YORK (CNN/Money) - Institutional Shareholder Services, the independent advisory firm, recommended Thursday that TRW Inc. investors support a proposal that would allow hostile suitor Northrop Grumman Corp. to begin accumulating shares of the defense and auto parts company.

ISS, which advises institutional investors how to vote on contested shareholder proposals, also supported two of the three nonbinding proposals Northrop submitted for a vote at TRW's annual meeting next week.

Each of the proposals is designed to place more pressure on the Cleveland-based TRW's board to open negotiations on Northrop's rejected $6.7 billion hostile takeover offer.

However, a U.S. federal judge on Thursday also granted TRW's request to postpone until May 3 a special shareholder's meeting scheduled on April 22 to vote on that proposal. U.S. District Court Judge John Manos approved the motion to reschedule the meeting, but also included a two-day stay on the order, allowing Northrop Grumman to appeal the ruling.

The Los Angeles-based defense giant said it would appeal, but with less than two business days remaining before the original meeting date, it seems unlikely the ruling could be overturned in time.

Ohio state law requires the special meeting to determine whether Northrop Grumman (NOC: Research, Estimates) should be allowed to begin accumulating TRW shares tendered in support of its $53-per-share takeover proposal.

The state's Control Share Acquisition act limits investors from buying more than $250,000, or 0.5 percent, of a target company's stock without shareholders' approval.

"We don't think the extra time is going to change (the outcome) at all," said Albert Myers, Northrop Grumman's treasurer and head of mergers and acquisitions. "However, obviously we would have preferred not to have an arbitrary two-week delay."

TRW Inc. advised shareholders to reject Northrop Grumman's revised $6.7 billion takeover bid Wednesday, calling the defense contractor's offer "financially inadequate" and "not in the best interests of TRW's shareholders."

In recommending its shareholders reject the offer, TRW said Northrop's bid continues to undervalue TRW's businesses and its opportunities.

Northrop increased its bid to acquire TRW Inc. Monday to $6.7 billion, a rise of 13 percent from the unsolicited $5.9 billion offer the components maker's board rejected a month ago.

The new offer is valued at $53 a share, compared with an original offer of $47 a share.

Though it rejected Northrop's offer yet again, TRW indicated Wednesday that it is up for sale and willing to open its books to other potential bidders, including Northrop.

TRW's board has authorized management and advisers to explore all strategic alternatives and previously retained Goldman Sachs and Credit Suisse First Boston as its financial advisers.

TRW Chairman Phil Odeen said Wednesday that the defense and auto parts maker has received unsolicited offers of interest. But a company spokesman declined to comment on whether those bids were for all or part of the company.

The company is also in the process of selling its aeronautics business, which is valued at about $1 billion, the spokesman said.

"Our board has been authorized to initiate a process to explore all options," Odeen said on a conference call open to analysts.

Press reports said that U.S. companies Honeywell and United Technologies, and Britain's Smith Industries, have approached TRW to buy the unit.

TRW also plans to spin out its automotive unit into a separately publicly traded company by the end of the year, Odeen said. Sales for the unit remained flat at $2.6 billion in first quarter.

The company has yet to decide whether it will launch an initial public offering of the unit. However, shares will be distributed to stockholders by fourth quarter, a spokesman said.

Despite the delay in the special shareholders meeting, TRW's annual meeting is still on schedule for Wednesday, April 24, at which shareholders will be asked to vote on three other Northrop proposals and TRW's board nominees.

ISS advised TRW investors to support two of the nonbinding proposals submitted by Northrop -- one recommending the board give Northrop access to the books of the defense and auto parts firm and the other suggesting the board create an independent committee to review the takeover bid.

Separately, TRW said its first-quarter net income climbed 17 percent on cost-cutting and restructuring efforts as well as strength in government business.

The company also raised its 2002 profit target to between $3.55 and $3.60 per share from an earlier view of $3.30, based on a strengthening economy and the U.S. government's increased defense spending.

TRW reported a net profit of $91 million, or 71 cents per share, compared with $78 million, or 62 cents per share, a year earlier. Excluding special items, earnings rose to 71 cents per share from 59 cents.

Wall Street analysts had expected a profit of 62 cents to 68 cents per share, with a mean estimate of 64 cents, according to First Call.

TRW (TRW: Research, Estimates) closed down 39 cents to $53.46 on the New York Stock Exchange Wednesday, but still remains above Northrop's offer price.  

--from staff and wire reports