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Raytheon leads Hughes bid
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January 13, 1997: 11:41 a.m. ET
Northrop Grumman still seeks GM unit as auction winds down
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NEW YORK (CNNfn) -- It looks like Raytheon is leading its tug-of-war with Northrop Grumman Corp. over the defense-related assets of Hughes Electronics Corp., according to Monday's Wall Street Journal.
Raytheon is reported to have bid about $9.5 billion for the Hughes unit.
But neither bidder seemed to know the outcome after the auction for Hughes missile and defense electronics operations started to wrap up over the weekend.
Northrop now appears discouraged by signs that it may be out of the bidding, the Journal reported. Lawyers for Raytheon and Hughes' parent General Motors continue to work on hammering out a possible agreement, the newspaper said.
Despite the signs, observers remained cautious about the likely conclusion of bidding. Twice last week, GM and Hughes asked Raytheon and Northrop Grumman to submit final bids.
"We're just trying to get top dollar, that's all. We're not holding out," said John F. Smith Jr., GM chairman and chief executive officer, explaining the move at a Sunday reception in Detroit.
GM is expected later this week to hold a news conference about the auction, the Journal reported.
Discussions between GM's capital-stock committee and its board of directors could slow a final decision. The complexity of the deal could put the brakes on as well.
General Motors reportedly hopes to fend off a big tax bill that a traditional sale would bring by breaking the transaction into two parts. Newly issued Hughes debt would produce cash for part of the payment, and part would come in the form of the acquirer's stock. 
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