| BUSINESSWEEK ONLINE : JUNE 21, 1999 ISSUE | ||||||||
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| BUSINESSWEEK INVESTOR -- INSIDE WALL STREET
A New Home for AHP? Near-panic selling hit the stock of American Home Products (AHP) when the drugmaker warned on June 1 that earnings would fail to meet analysts' expectations. The stock tumbled 10%, to 52 a share. But Nancy Tengler, chief investment officer at Global Alliance Value Investors, saw the drop as a chance to add to her holdings on the cheap. She did, at 52 to 54. The stock closed on June 8 at 54. Tengler thinks the stock, down from 70 1/4 in mid-April, could again pull up to that level this year. ''This company has far and away the best product pipeline in the industry,'' she says. Tengler believes the stock is ripe for either a takeover ''by the likes of pharmaceutical giant Merck (MRK) or for a merger of equals with Warner-Lambert (WLA) .'' She thinks AHP is already in talks with suitors. AHP Chairman Jack Stafford, 63, ''has no obvious successor and wants a deal,'' says Tengler. She notes that Stafford tried for mergers last year--with Monsanto and SmithKline Beecham (SBH) . Neither was completed. She says that, for Warner, ''merging with AHP could be a quick way to enhance its pipeline.'' She thinks Merck is also a logical buyer because it, too, has a pipeline problem. ''A Merck-AHP link would create a giant in cardiovascular and women's health therapies,'' says Tengler. AHP's Wyeth-Ayerst unit is the world leader in women's drugs, including Premarin. Other important AHP drugs include Cordarone for arrhythmia and Enbrel for rheumatoid arthritis. She figures AHP is worth 75 to 80 in a deal. AHP spokesman Lowell Weiner declined comment on the speculation but said AHP ''is always open to opportunities.'' Merck won't comment as a matter of policy. BY GENE G. MARCIAL _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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