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Case
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Reference no. 9-903-115
Published by:
Harvard Business Publishing (2003)
Version:
10 January 2008
Length:
10 pages
Data source:
Published sources
Abstract:
TRW, a leading supplier of advanced technology products for the auto, defense, and aerospace markets, receives an unexpected stock-for-stock offer from defense company Northrop Grumman Corp. The $11.4 billion aggregate offer, which represents a 22% premium over the average trading price for the previous 12 months, comes just two days after TRW's CEO has, without notice, resigned. TRW's board is faced with a difficult decision on which they vote in a few days: Should they 'just say no', rejecting the offer out of hand? Should they negotiate a friendly deal with Northrop? Or should they put TRW in so-called 'Revlon mode' and auction the company to the highest bidder? This case, grounded in the specifics of Ohio's strict antitaker laws, leads to a discussion of defensive tactics, hostile tender offers, the duties of the board, and fixed-price exchange. For use in an advanced course on mergers and acquisitions. Supports the introduction of material on the valuation of equity-linked consideration and the legal and regulatory framework of acquisitions.
Settings:
Ohio, 2002, 94,000 employees, USD16.4 billion revenues
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