TRW Urges Proposal Rejection

TRW Inc., trying to fend off an $11.4-billion hostile takeover bid by Northrop Grumman Corp., urged shareholders to reject the defense contractor’s proposals to create an independent directors committee and increase the disclosure of financial information.

The resolutions by Los Angeles-based Northrop, the fourth-largest U.S. maker of military equipment, are a “self-serving attempt” to force a sale, TRW said in a statement. TRW’s annual meeting is April 24, two days after the company will hold a special shareholder meeting about the $47-a-share buyout proposal.

TRW said providing confidential information doesn’t make sense in light of its board’s earlier rejection of the offer. Northrop has said it’s willing to consider a higher price if the auto-parts maker and defense contractor provides more details. TRW’s recommendation may put pressure on Northrop to raise the amount, analysts said.

“Northrop absolutely has to raise the bid,” said Richard Turgeon, an analyst with Victory Capital Management, which holds about 395,000 shares of TRW. “If they don’t, TRW will move ahead with the auction of the company.”

TRW Interim Chairman Phil Odeen plans to spin off or sell the company’s auto-parts unit to become a stand-alone defense contractor. Northrop plans to separate the automotive unit and keep the missile defense and satellite units.

Frank Moore, a spokesman for Northrop, declined to comment.

TRW shares fell 20 cents to $51.15 on the New York Stock Exchange. Northrop fell $1.12 to $108, also on the NYSE.