Northwest Industries stock dropped 3 7/8 yesterday to 47 1/2 amid continuing uncertainty about the status of a $1 billion offer to buy the company.

Northwest directors met yesterday, and the company is expected to issue a statement today. Officials at Northwest Industries and Kelly, Briggs & Associates, the Chicago firm leading an investor group that wants to buy the company, had no comment yesterday.

Northwest stock, the third most active issue on the Big Board yesterday with 1.46 million shares traded, fell sharply last month after the investor group failed to arrange financing for the buyout by a Dec. 31 deadline. Northwest has extended the deadline to Jan. 31.

The initial buyout proposal by the investor group in September called for stockholders to receive $50 in cash and one share of Lone Star Steel Co. for each Northwest share. Lone Star Steel, a Northwest subsidiary, is expected to be spun off as a publicy traded company.

On Monday, Northwest stock jumped 2 1/4 after rumors began circulating that the investor group was close to arranging financing for a revised offer of $40 in cash, $10 in debt and one share of Lone Star Steel for each Northwest share. Analysts said yesterday the stock dropped again because there was no confirmation that the financing had been arranged or that Northwest's directors were prepared to accept the lower bid.

"I have a gut feeling that this whole thing is cancelled, and -- if there is no deal -- the stock could trade down to $38," said Merrill Lynch analyst Daniel A. Roling. "The more complicated things are, the more likely it is to fall apart. More discussion means things are not as simple as we were led to believe.

"I think we will see a non-event statement from Northwest which allows them to come up with some other form of restructuring with somebody else or with Kelly, Briggs," he said.

"I think there is a lower bid forthcoming, but there is a danger the lower bid will be rejected," said Dean Witter analyst James Dunne. "I'm sure he Northwest Chairman Ben W. Heineman would like to get this over with, but I can't believe the board would accept a lower offer when they don't see that reflecting deterioration of their assets. The board's responsibility is to the shareholders, not to Kelly, Briggs."

Northwest is a Chicago-based conglomerate that owns companies in industries ranging from oil services to Western boots.

Some observers believe the investor group has had a tough time convincing the banks and equity investors to participate in the buyout, while others believe the delays are part of a sophisticated attempt to try and purchase Northwest at a lower price.