A three-judge federal appeals panel today upheld a lower court's ruling that effectively kills LTV Corp.'s controversial, $450 million bid to take over Grumman Corp.
In the past LTV officials have said that if the appeals court upheld the lower court's injunction--a ruling that prevents LTV from soliciting or paying for Grumman shares--the Dallas-based conglomerate would be forced to retract its bid.
Today, however, LTV Vice President Julian Scheer said that although the company is "disappointed," corporate officials "haven't had a chance to review the decision" or determine what course of action LTV will take.
However, the choices facing LTV are to spend months or even a year in a lengthy antitrust trial or to call off its takeover attempt. Wall Street sources said they expect LTV to drop the bid.
Grumman Corp., based on Long Island, fought hard to keep its independence from LTV. Both the Labor Department and the Securities and Exchange Commission have taken Grumman to court to challenge some of the company's "defensive" actions.
The Labor Department charged trustees of Grumman's pension fund with violating their fiduciary obligation by buying 1.2 million shares of Grumman stock to keep it away from LTV. The three trustees of the Grumman pension plan are company executives, including Chairman John Bierwirth. The trustees have denied the Labor Department charges.
On Monday the SEC filed suit in federal court charging that when Grumman notified the agency that it might buy up to one million of its shares and that its pension fund might buy up to 1.3 million shares, the company failed to tell the regulatory agency that it was trying to fight off LTV.
Grumman said that in making its filing with the SEC it complied with all laws.
Grumman officials said they were "exhilirated" by the appeals court ruling today. Three federal judges said that they found enough "probability of success" in Grumman's antitrust suit against LTV to warrant the preliminary injunction issued by U.S. District Court Judge Jacob Mishler.