FOES UP BIDS FOR HUGHES UNIT.

Byline: Joann Muller The Boston Globe

Raytheon Co. and rival Northrop Grumman Corp. both increased their bids for General Motors Corp.'s Hughes defense unit to about $10 billion Thursday, and GM's board of directors is expected to hold a special meeting today to weigh the offers, according to individuals close to the bidding.

But as the intense bidding war appeared to be coming to a close, some Wall Street analysts said the ultimate price may be too high.

Both companies added about $1 billion to their final bids, which were submitted late Wednesday. Although Northrop Grumman's previous $9.2 billion bid was slightly higher than Raytheon's $9 billion offer, GM is said also to be concerned with which company's stock is a better investment, since GM will be paid, at least partially, in stock of the buyer.

Northrop Grumman's stock price is about $30 more than Raytheon's, but Raytheon stock could be worth much more if the company is broken up, analysts believe. Also, Raytheon, with its recent plans to buy Texas Instruments Inc.'s $1.8 billion defense unit, may have the best long-term prospects in the defense industry, they said.

Both Raytheon, based in Lexington, Mass., and Northrop Grumman are eager to win the battle for Hughes and solidify their position as a survivor in the swiftly consolidating defense industry. But they are trying to balance that desire with a fear of paying too much for the $6 billion maker of Tomahawk cruise missiles and other defense electronics.