Updated from 6:57 a.m. EST

Shares of

Pfizer

(PFE) - Get Report

and

Warner-Lambert

(WLA)

were down in postmarket trading Wednesday on news that the companies had agreed on a price for their anticipated merger.

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New York-based Pfizer, which has been seeking for nearly three months to acquire Warner-Lambert, was down 1, or 3%, to 36, and Warner-Lambert, based in Morris Plains, N.J., was down 7/8, or 1%, to 95.

Pfizer and Warner-Lambert are valuing the potential takeover at $84.9 billion, or more than $99 a share, according to a report from

Dow Jones

. Terms of a deal were not immediately available, but the price suggests that Pfizer agreed to increase the share swap to 2.75 shares for each Warner-Lambert share from 2.5 shares.

A Warner-Lambert spokesman had no comment but said, "You might want to check back tomorrow." Pfizer's spokesman said: "We are not confirming any reports. The talks are continuing and we are hoping that we come to an agreement soon." A spokesman from American Home Products declined to comment.

The price was reportedly the last stumbling block ahead of the deal's completion, with an agreement hinging on Pfizer's willingness to raise its bid.

American Home and Warner-Lambert announced a merger deal at the beginning of November. Pfizer counterbid for Warner-Lambert on the same day.

Pfizer's original offer bested

American Home Products'

(AHP)

offer of 1.49 of its shares.

Warner-Lambert had since resisted Pfizer's overtures, but Pfizer's strong financial case for an acquisition put increasing pressure on Warner-Lambert to negotiate. In addition, Pfizer's original $82 billion bid has fallen only 4%, to $79 billion, while the current value of American Home's $78 billion is now 24% lower, at $59 billion. Warner-Lambert finally agreed to talk with Pfizer in mid-January.

Though Pfizer remains the company with the most realistic bid, Warner-Lambert could still try to block a deal by courting another company, either another pharmaceutical concern or a consumer conglomerate like

Procter & Gamble

(PG) - Get Report

, which terminated discussions with Warner-Lambert and American Home last week.

Even if they reach an agreement soon, Pfizer and Warner-Lambert would still have to negotiate with American Home to let Warner-Lambert go. A negotiation could force Pfizer to pay a $1.8 billion breakup fee and that could eliminate Pfizer's projected cost savings from an acquisition.

The loss of Warner-Lambert would be American Home's third aborted merger. One with

Monsanto

(MTC) - Get Report

broke down after an agreement was reached and one with

SmithKline Beecham

(SBE) - Get Report

failed just before an agreement was announced.

Shares of American Home, based in Madison, N.J., closed up 1 1/8, or 3%, to 46 1/8.