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25 Jun 02. Defense contractor Northrop Grumman Corp. (NYSE:NOC – News). has revised its earlier bid for TRW Inc., (NYSE:TRW – News) offering a
price in the range of $57 to $58 a share, and hoping to thrash out an agreed
transaction, sources familiar with the talks said on Tuesday.

Northrop’s revised offer is in all shares and is up from its current hostile bid
of $55.31 a share, based on Northrop’s Monday closing price of $128.35. The
revised offer values TRW at about $7.2 billion.

Northrop and TRW are expected to hold talks in the next few days and one person
familiar with those talks said Northrop’s offer was not final and may change
during those talks. Any upward revision would depend on the final cost savings
plans that both parties can agree to, he said.

Comment: As we said in BATTLESPACE UPDATE Vol.4 ISSUE 24, June 13th 2002
‘The matter of TRW’s future lies in price and it is likely that when Northrop’s bid for TRW expires this Friday, the company could issue a knock-out blow’. We have always predicted that Northrop would win this bid with an increased offer and it looks as if this price is in the range suggested by a number of observers.

Although three bidders have announced an interest in TRW’s Space and Electronics business (See BATTLESPACE ALERT Vol.4 ISSUE 24, June 25th 2002), this announcement makes the likelihood of a Northrop win likely. With BAE SYSTEMS wishing to expand its US interests, today’s JTRS announcement, with BAE as a partner in the Boeing team, may mean that BAE could return to looking at a deal to buy ITT’s Defense and Aerospace segment which the company looked at in the late nineties and shied away due to price.

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