Latest Drug Company Deal Not Drawing Believers
But that didn't stop investors from trying to make money off the news.
"It's a combination of two weak companies," says Steven Eick with New York arbitrage shop Avery Partners. Rumblings about Monsanto shopping itself around had spread across the Street since the November news of the ever-complicated American Home Products (AHP)-Warner-Lambert (WLA) merger that has degenerated into a run at Warner-Lambert by Pfizer (PFE).But sell-side research had hinted the best price for Monsanto would probably come if it axed itself into pieces, possibly fetching somewhere in the mid-50s, Eick said. So news Monday of the proposed tie-up with Pharmacia "was not unexpected. In fact, it was sort of dreaded," he added. Ewww gross! Wall Street screwed up its face at the deal as if the two ugly kids in the class had decided to go to the prom together. Monsanto stock sank 5 3/4 to 36; Pharmacia fell 4 1/16 to 46 7/16.
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