Northrop Grumman to sell $1.2 bln of convertibles, stock; revises Newport News bid

Nashville, Tenn., Nov. 6 - Northrop Grumman Corp. announced Tuesday that it will sell $1.2 billion of stock and mandatory convertibles with proceeds earmarked to reduce debt and general corporate purposes. The deals will be launched next week. Price talk is expected to emerge this week, market sources said.

Joint lead managers for the sale are J.P. Morgan and Salomon Smith Barney

In other news Tuesday, Newport News Shipbuilding said that it has received a revised proposal from Northrop in which the collar used in determining the amount of Northrop Grumman common stock and cash to be received by Newport News stockholders would be adjusted so that Newport News stockholders would receive a value of $67.50 per share if the market value of Northrop Grumman common stock does not exceed $100 per share and is not less than $80 per share. Newport News said that it expects that its board of directors will meet on Wednesday to consider the new Northrop Grumman proposal. The estimated $2.1 billion merger would create the world's biggest naval warship builder that makes B-2 bombers and nuclear submarines.

Northrop Northrup shares closed down $1.27 to $98.35.

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