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U.S. aerospace and auto parts manufacturer TRW Inc. and hostile pursuer Northrop Grumman Corp. agreed on terms of a confidentiality agreement Monday, allowing Northrop to join the list of companies allowed to look at TRW’s internal financial data. Both companies announced the development but did not disclose the details — specifically, how long Northrop would have to wait to make another bid. That “standstill” language in the confidentiality agreement had been a sticking point in negotiations. TRW has been pushing for at least six months and Northrop has been arguing for 75 days. TRW says several other parties had signed confidentiality agreements to conduct due diligence but has declined to name them. Northrop also extended its $53 per share offer to May 17. About 3.6 percent of TRW shares had been tendered by Friday, the previous deadline. Last week, Cleveland-based TRW said that its shareholders supported the company’s plan to revamp itself by selling its aeronautical systems unit, spinning off the auto parts segment to shareholders and retaining a core space and missile defense business. But the company’s board remains interested in Northrop’s $11.7 billion hostile overture. “This is the opportunity to change the landscape,” said Jon Kutler, head of Quarterdeck Investment Partners. “Defense properties are the business to be in, and auto parts aren’t.” Northrop is offering TRW shareholders the equivalent of $53 per share in Northrop stock, for a total deal value of $11.7 billion, including debt. By signing a confidentiality agreement, Los Angeles-based Northrop joins a list of other bidders believed to include defense giants Boeing Co., Lockheed Martin Corp. and General Dynamics Corp. Smaller players, such as L-3 Communications Holdings Inc., United Technologies Inc., Honeywell International Inc. and U.K. aerospace firm Smiths Group, all are said to be interested in TRW’s aeronautical systems unit, a maker of spare parts for aircraft, that could fetch between $1.2 and $1.6 billion, analysts said. TRW has hired investment advisers Goldman, Sachs & Co. and Credit Suisse First Boston and the law firm Skadden, Arps, Slate, Meagher & Flom. Northrop has hired Salomon Smith Barney Inc. and Gibson, Dunn & Crutcher. Copyright (c)2002 TDD, LLC. All rights reserved.

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