General Dynamics Bids for Newport News

Newport News Shipbuilding Inc., the only maker of nuclear aircraft carriers, said it got an unsolicited $1.35-billion cash offer from General Dynamics Corp., the fourth-largest U.S. defense contractor. The $38.50-a-share bid, which represents a 35% premium to Newport News’ closing share price, requires “careful assessment” of antitrust risk, Newport News Chief Executive William Frick said in a statement. The Newport News, Va.-based company is acquiring Avondale Industries Inc. That transaction, which is under antitrust review, prevents Newport News from agreeing to any sale that could be blocked by regulators. The combination would make Falls Church, Va.-based General Dynamics the Navy’s biggest contractor, with about $4.5 billion in prime contracts in the government’s 1998 fiscal year. General Dynamics said it’s confident the transaction would pass antitrust and Defense Department review. In trading on the NYSE, Newport News shares rose 63 cents to close at $28.44, and GD shares rose $1.94 to close at $60.06.