Northrop Grumman said it would announce the next move today in its bid for TRW Inc. after the latter's shareholders apparently rejected the unsolicited $6.7 billion offer. In a vote required by Ohio law, the stockholders technically were deciding only whether Northrop Grumman should be permitted to buy 20 percent of TRW's shares. But an OK would have given the pursuing defense contractor leverage to attempt a complete takeover. TRW executives said the proposal was defeated "decisively," although complete returns are not expected for at least a week. TRW said discussions with Northrop Grumman on some sort of friendly hookup "are continuing" and could lead to a "mutually acceptable agreement."
The India affiliate of embattled Arthur Andersen LLP, virtually its last large foreign partner, will merge with rival accounting firm Ernst & Young, reports said. Meanwhile, the head of an independent oversight board appointed to try to rescue Andersen said that effort was "in a state of suspension." Paul Volcker, the former Federal Reserve Board chairman, said none of his conditions had been met, such as settling a federal obstruction charge the trial begins today and shareholder lawsuits stemming from the Enron Corp. debacle.
A class action shareholder lawsuit accused WorldCom Inc. of inflating stock prices by filing misleading financial statements with the Securities and Exchange Commission (SEC). Among those named in the suit are former chief executive Bernard Ebbers, who resigned last week, and the telecommunications firm's auditor, Arthur Andersen. Clinton, Miss.-based WorldCom already is the subject of an SEC inquiry and has seen its share price plummet almost 90 percent since Jan. 1.