Northrop may be new takeover target

NEW YORK - Wall Street was speculating yesterday that Northrop, Martin Marietta's rival for control of the defence contractor Grumman, could itself become the object of a hostile takeover bid - perhaps by Martin Marietta, writes Larry Black.

Northrop shares rose another dollars 1/2 to dollars 44 1/4 after running up by almost dollars 2 on Wednesday as rumours of a new Martin Marietta bid for both companies continued to circulate.

A week ago Northrop unexpectedly challenged Martin Marietta's friendly dollars 55-a-share merger deal with Grumman, offering dollars 60 a share for the Long Island electronics and aerospace company.

Grumman directors met yesterday to consider the two bids, but any decision is likely to be delayed while an employee group that controls about a third of its shares confers with its advisers.

Many analysts have suggested that Northrop's counter-offer is an attempt to stave off an unwelcome bid for its own assets - a case of 'buy or be bought', as one put it yesterday. The company - which is smaller than Grumman, let alone Martin Marietta - is considered too small to survive in an era of defence industry consolidation.

The speculation was further fuelled on Wednesday when Northrop's chief executive, Kent Kresa, said he would consider serious bids for the company. But he said Northrop was not for sale and would prefer to remain independent.