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Newport reaffirms buyout
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June 6, 2001: 11:08 a.m. ET
Shipbuilder says it remains committed to General Dynamics' $2.1B bid
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NEW YORK (CNNfn) - Newport News Shipbuilding Inc. reaffirmed its support for General Dynamics Corp.'s $2.1 billion takeover bid Wednesday but said it could not take a position on a rival bid from Northrop Grumman until it obtains more information.
"We will seek to determine the position of the U.S. government regarding these two offers as expeditiously as possible," Newport News CEO Bill Fricks said in a statement. "The primary interest of the board of directors is for our stockholders to receive the best value for their shares in any acquisition of Newport News Shipbuilding."
The board of Newport News (NNS: up $0.19 to $63.85, Research, Estimates), which builds aircraft carriers and submarines for the U.S. Navy, voted in late April to accept General Dynamics' (GD: down $1.28 to $78.84, Research, Estimates) offer of $67.50 a share.
Northrop Grumman (NOC: down $0.60 to $89.64, Research, Estimates), which countered with a rival bid offering the same amount in stock and cash, called its deal superior, saying it was more likely to be approved by regulators.
Northrop Grumman spokesman Randy Belote said the company is disappointed but undeterred. Northrop Grumman plans to take its case before Newport News' stockholders, he said.
"Northrop Grumman remains fully committed to proceeding forward as we believe our offer is clearly superior and does not create a monopoly, and therefore has a greater probability of gaining regulatory approval," Belote said.
Both Newport News and General Dynamics own shipyards that build and refurbish submarines and other ships. Although Newport News is the only company that builds aircraft carriers for the Navy, General Dynamics has the capacity for such work.
"Northrop Grumman has asserted that its offer has a greater certainty of completion than the General Dynamics offer as a result of government regulatory issues," the Newport News statement said. "However, the NNS board of directors cannot conclude that the Northrop Grumman offer has a greater certainty of completion than the General Dynamics offer based on information currently available to it."
General Dynamics and Newport News representatives are expected to meet with Justice Department and Pentagon officials Wednesday to discuss the transaction, a Newport News spokeswoman said.
A Pentagon spokesman declined to comment on any of the proposed transactions Wednesday as did a Justice Department spokeswoman. Both declined to confirm whether the agencies were meeting with the companies Wednesday.
Northrop has said its proposed merger with Newport News stands a better chance of being approved because Northrop does not compete with Newport News. 
From staff and wire reports
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