Auto components maker and defence contractor TRW Inc. yesterday rejected a US$6-billion takeover offer from Northrop Grumman Corp. for a second time, calling it inadequate, and said it intended to spin off its auto parts business instead.
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Its board of directors has unanimously determined that Northrop Grumman Corporation’s March 4, 2002 unsolicited exchange offer for all outstanding shares of TRW common stock for $47 per share is financially inadequate and not in the best interests of TRW’s shareholders, the company said in a statement. The statement added: ‘Accordingly, the TRW board of directors urges TRW shareholders to reject Northrop Grumman’s offer and not exchange their shares.’
“As we indicated when we rejected Northrop Grumman’s earlier proposal, this is all about shareholder value,” said Philip A. Odeen, TRW’s chairman.
“TRW has been examining a potential separation of our Automotive business for some time,” added Mr. Odeen. “We believe that our strategic plan announced today will create two ‘pure play’ independent businesses, each positioned to deliver superior growth and returns. Additionally, this plan will enable each company to optimize strategic and financial flexibility and capture value against best-in-class industry benchmarks. We believe our strategic plan will deliver greater value to TRW shareholders than Northrop
Grumman’s offer.”
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