TRW Remains Committed to Its Value Enhancement Plan and Exploration Of Strategic Alternatives
Continues to Urge Shareholders to Reject Northrop’s Inadequate Offer
TRW Inc. today
announced that it appears that TRW shareholders have rejected Northrop Grumman
Corporation’s control share acquisition proposal on both required
votes under Ohio law, based on the number of proxies submitted to the
independent inspector of election, IVS Associates, Inc., at today’s Special
Meeting of TRW Shareholders. Approval of the proposal would have allowed
Northrop, under Ohio’s Control Share Acquisition Statute, to purchase more
than 20 percent of TRW’s shares pursuant to Northrop’s unsolicited $53* per
share exchange offer. TRW’s Board of Directors has unanimously rejected
Northrop’s offer as financially inadequate, highly conditional and not in the
best interests of TRW shareholders.
“TRW shareholders have spoken and their message is clear – they support
the TRW Board and the actions it is taking to enhance shareholder value. As
you are aware, the focus of our Board has been on shareholder value. In this
regard, in addition to our Value Enhancement Plan, we are exploring other
strategic alternatives. We are already working with several parties toward
that end,” said Philip A. Odeen, chairman of TRW. “We have encouraged
Northrop to participate in this process. Much attention, I know, has been
focused on this issue. Last night, Northrop and TRW representatives met. We
had a very constructive discussion regarding the confidentiality agreement.
If Northrop wishes to proceed, I am confident that we can reach a mutually
acceptable agreement.
“TRW’s strong operating performance and recent key contract wins
demonstrate the strength of our businesses. Our Board and management are
taking all the right steps to ensure our shareholders receive full value for
their investment. We urge our shareholders to reject Northrop’s offer and not
tender their shares,” concluded Mr. Odeen.
Prior to the closing of the polls at the Special Meeting, all proxy cards
received by TRW were turned over to the independent inspector of election who
will tabulate the results. It is expected that the certified results will be
provided in the near future. TRW will publicly announce the certified results
once they are made available to the Company.
TRW provides advanced-technology products and services for the aerospace,
systems, and automotive markets.
TRW common stock to be exchanged for that number of shares of Northrop Grumman
common stock having a value equal to $53. The exact exchange ratio would be
determined by dividing $53 by the average of the closing price of Northrop
Grumman common stock for the five consecutive trading days ending immediately
prior to the second trading day prior to the expiration of the Offer to
Exchange, but in no event will the exchange ratio be more than 0.4690
($53/$113) or less than 0.4309 ($53/$123)
This press release contains certain “forward-looking statements” that TRW
believes are within the meaning of the Private Securities Litigation Reform
Act of 1995. The safe harbors intended to be created thereby are not
available to statements made in connection with a tender offer and TRW is not
aware of any judicial determination as to the applicability of such safe
harbors to forward-looking statements made in proxy solicitation materials
when there is a simultaneous tender offer. However, shareholders should be
aware that the preparation of any such forward-looking statements requires the
use of estimates of future revenues, expenses, activity levels and economic
and market conditions, many of which are outside the Company’s control.
Further, the Company’s results could be affected by the ability to obtain new
contract awards; the level of defense funding by the government and the
termination of existing government contracts; pricing pressures from
customers; moderation or decline in the automobile build rate; changes in
consumer debt levels; work stoppages; unanticipated downturn in the financial
condition of, or business relationships with customers or suppliers; the
ability to reduce the level of outstanding debt from cash flow from operations
and the proceeds from asset dispositions; a credit rating downgrade; increase
in interest rates; customer recall and warranty claims; product liability and
litigation issues; changes to the regulatory environment regarding automotive
safety; the introduction of competing products or technology by competitors;
the ability to attract and retain skilled employees with high-level technical
competencies; the financial results of companies in which we have made
technology investments; the availability of funding for research and
development; economic, regulatory and political domestic and international
conditions; fluctuations in currency exchange rates; and the impact of
additional terrorist attacks, which could result in reduced automotive
production, disruptions to the transportation system, or significant and
prolonged disruption to air travel. In addition, there can be no assurance:
(i) that an agreement relating to any investment in the Company, or relating
to any sale or other distribution of all or a part of the Company’s operating
businesses will be reached, or that if an agreement is reached, that the
transactions contemplated by such agreement will be consummated; (ii) that the
Company will spin off the Automotive business or that such spin-off will be
complete by the end of the fourth quarter 2002; (iii) that the Company will be
successful in reducing the amount of its indebtedness, or that the methods
described for debt reduction will be utilized; (iv) as to the amount by which
debt will be reduced; (v) that the Company’s strategy will deliver any
particular level of value to TRW shareholders; (vi) that defense spending will
rise and research, development, test and evaluation budgets will increase;
(vii) that the commercial aerospace industry will stabilize; (viii) that North
American 2002 light vehicle production will increase from 2001 levels; (ix)
that 2002 earnings per share estimates will be met or exceeded; (x) with
respect to the expected amounts of the Company’s operating cash flows in 2002,
that such amounts will be utilized to reduce the amount of the Company’s
indebtedness; (xi) with respect to the amounts that will be realized, if any,
by the Company from divestitures; (xii) with respect to the amount of sales,
earnings per share or cash flow that will be realized by the Company in 2002;
and (xiii) that the Company’s costs will decrease in 2002. Other factors and
assumptions not identified above are also involved in the preparation of
forward-looking statements, and the failure of such other factors and
assumptions to be realized may also cause actual results to differ materially
from those discussed. The Company assumes no obligation to update such
estimates to reflect actual results, changes in assumptions or changes in
other factors affecting such estimates other than as required by law.
