The Federal Trade Commission voted yesterday to seek a temporary injunction to block LTV Corp.'s $450 million takeover bid for Grumman Corp. on antitrust grounds, sources said.
The decision, adopted by the commission by a 3-to-0 vote, is the first sign that the government is concerned about the hotly disputed takeover attempt. FTC Chairman James C. Miller III had not cast his vote by late yesterday, and no further details of the closed deliberations were available.
But the papers will be filed only if a federal appeals court Wednesday lifts another temporary injunction against the merger won by Grumman earlier this month on antitrust grounds.
Also yesterday, U.S. District Court Judge Jacob Mishler, who issued the injunction that will be appealed Wednesday, said he will hear arguments Thursday on LTV's charges that Grumman has violated securities laws by misrepresenting LTV's tender offer.
Further complicating the picture for the merger is a Labor Department suit against trustees of Grumman's pension plan for using pension fund assets to buy the company's stock as part of Grumman's strategy to block the purchase. Hearings on that suit are scheduled for Friday.
In addition, the Securities and Exchange Commission is probing the stock activity surrounding the takeover attempt.
If the FTC's move thwarts the takeover bid, it would mark the second time in recent days that federal trustbusters have hampered a merger. Just last week the Justice Department announced its intention to sue to block the Jos. Schlitz Brewing Co.'s attempted takeover of G. Heileman Brewing Co, The next day, Schlitz announced cancellation of the bid.
LTV announced a bid for Grumman on Sept. 24, a transaction that would make the combination the nation's seventh-largest defense contractor. LTV offered $45 a share for about 10 million Grumman shares, a total of about 70 percent of the company's outstanding stock.