Still Not Good Enough, Says TRW

Defense contractor and auto parts maker TRW Inc. on Wednesday advised shareholders to reject Northrop Grumman Corp.'s sweetened $6.7 billion takeover offer, calling the U.S. defense giant's bid financially inadequate.

The Cleveland-based TRW said its board unanimously voted to reject the hostile $53 per share, all-stock bid, which Northrop submitted on Sunday night after revising its initial $47 per share offer.

TRW, which makes defense and aerospace equipment and automotive parts including air bags and seat belts, said its proposal to spin off its automotive units would provide more value to shareholders.

"As we've said all along, this is all about shareholder value and this board will continue to do what is in the best interests of TRW shareholders," said TRW chairman Philip A. Odeen.

TRW's board said the new offer "continues to undervalue TRW's business and its opportunities," and said the company's current plan to accelerate its debt reduction and spin off its automotive parts business would offer shareholders more long-term value.

Pursuant to Ohio law, TRW shareholders are scheduled to meet on April 22 to vote on whether the board should pursue the transaction.