NEW YORK (CNN/Money) -
Northrop Grumman Corp. finally signed a confidentiality agreement with TRW Inc. Monday and will join other potential bidders in receiving non-public information about TRW.
Los Angeles-based Northrop (NOC: down $2.33 to $120.05, Research, Estimates), which had balked at signing the contract, said the confidentiality agreement is on terms that are acceptable to both companies. Those terms were not disclosed.
Northrop declined TRW's previous offer to open its books because TRW (TRW: up $0.25 to $55.25, Research, Estimates) demanded a standstill in the contract that would prevent Northrop from pursuing a hostile bid should TRW choose another suitor. Northrop spokesman Randy Belote confirmed that the new agreement between Northrop and TRW did include a standstill agreement, although details of that were not immediately available.
Northrop could complete its review of TRW data within the next 10 days, said Belote. While Belote said the company isn't committed to raising its offer, he said, "What we've indicated is that we have been wililng to pay full and fair value for TRW."
He said any new offer would take place in negotiations with TRW following the completion of an examination of the books.
Northrop shares dropped more than 2 percent Monday in late morning trading while TRW's stock gained marginally.
TRW shareholders Friday rejected a takeover proposal from Northrop that would have allowed the defense contractor to proceed with its $6.7 billion hostile bid, equal to $53 a share, which is slightly below current market value for the stock. Cleveland-based TRW, which has put itself up for sale, opened its books to several interested parties, but Northrop refused to take part in the process until now.
TRW (TRW: Research, Estimates) Chairman Philip Odeen said Monday that the company's exploration of strategic alternatives will deliver a higher offer than Northrop's offer.
| |
Related stories
| |
| | |
| | |
|
"We are pleased that we have reached a mutually acceptable agreement with Northrop and that it has chosen to participate in the process our board has established to deliver to TRW shareholders the value they deserve," he said. "We are confident that each of these avenues can deliver value to TRW shareholders in excess of Northrop's $53 per share offer."
TRW is also in the process of selling its aeronautics business, which is valued at about $1 billion.
Click here for a look at aerospace and defense stocks
Northrop has been trying to acquire TRW since February, when it first offered $47 a share, or $5.9 billion. After that effort was rebuffed, Northrop raised its offer to $53 a share, or $6.7 billion, in April. TRW's board called both offers inadequate.
|
