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Shorewood Packaging Rejects Unsolicited Bid From Rival Chesapeake

Also, Warner-Lambert moves to end drug agreement with Pfizer.

Shorewood Packaging


rejected an unsolicited $480 million bid from



, saying it was not for sale and would continue to pursue an attempted $700 million purchase of the rival company. Shorewood called Chesapeake's $16.50-a-share bid grossly inadequate.

For those of you who haven't had a chance to read

Merger Jargon for Dummies

, Chesapeake's move is a seldom-used strategy known as a

Pac-Man defense, which comes in response to Shorewood's $40-a-share bid for Chesapeake last month. Shorewood also has a trick or two up its sleeve, namely a poison-pill anti-takeover defense that would make it prohibitively expensive for any party to acquire more than 25% of its stock.

Speaking of pills, cholesterol drug Lipitor is shaping up as a major source of contention -- and possibly pain -- in the current merger skirmish between





(PFE) - Get Free Report


Retaliating against a hostile $80 billion takeover bid from Pfizer, Warner moved to end their agreement to jointly market Lipitor, the blockbuster cholesterol treatment with expected 1999 sales of more than $3.6 billion. Warner filed a counterclaim against Pfizer alleging "flagrant breach of contract," according to



Pfizer responded by saying it did not violate any of its agreements with Warner-Lambert and said it will continue to support Lipitor sales. If a court rules in its favor, Warner-Lambert said it would not be required to make payments to or share revenue with Pfizer. Earlier this month, Warner agreed to merge with

American Home Products


in a $67.1 billion deal.

Standard & Poor's





Old Kent Financial


will be added to the

S&P 500

index. Molex will replace



after the close of trading tomorrow. PacifiCorp is being acquired by

Scottish Power

. Old Kent will replace


(HON) - Get Free Report

after the close of trading on Dec. 1, due to its acquisition by fellow S&P 500 component

Allied Signal



After-Hours Trading

After-hours trading on

Island ECN

was very heavy, with the top five issues trading in excess of 200,000 shares each. The exchange was led all night by



, which traded in excess of 800,000 shares, an extraordinary volume.

Inexpensive tech stocks like

Imaging Technologies



Walker Interactive Systems


continued to pique the most interest.

Across town on


, volume was virtually nonexistent.

(AMZN) - Get Free Report

led on 1000 shares.

Island ECN, owned by Datek Online, offers trading, mainly in Nasdaq-listed stocks, from 8 a.m. to 8 p.m. EST.


MarketXT, formerly Eclipse Trading, offers after-hours trading to retail clients of Morgan Stanley Dean Witter'sundefinedMorgan Stanley Dean Witter Online and Mellon Bank'sundefinedDreyfus Brokerage Services. Clients can trade 200 of the most actively traded New York Stock Exchange and Nasdaq Stock Market issues, 4:30 p.m. to 8 p.m. EST Monday through Thursday.


explains how the rules change when the sun goes down in Investing Basics: Night Owl, a section devoted to after-hours trading.


Eric Gillin

In other post-close news (

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.


Earnings/revenue reports and previews

ITC Deltacom


said it expects fourth-quarter revenue and profits to fall below expectations due to a shortfall in sales to Internet service providers. The company said it expects a fourth-quarter net loss of 26 cents to 27 cents a share, compared to a previous forecast of a loss of 25 cents a share. The current 12-analyst estimate is for a loss of 24 cents a share.

Mergers, acquisitions and joint ventures

Chase Manhattan


said that about 21.5 million shares, or 71.9%, of

Hambrecht & Quist


stock have been tendered in its offer to buy the company. Chase also extended its offer to Dec. 8 from Nov. 29, making it the third time Chase has extended the offer in the past month.



said it would exercise an option to buy shares of



at $34.56. Elan said the total cost of the exercise deal is worth up to $182.8 million. The company also said it would exercise an option to buy shares of


at $61.01 each, making the deal worth about $76.3 million.

Offerings and stock actions

Continental Airlines

(CAL) - Get Free Report

said it increased its stock repurchase program by $400 million. Continental also said its 2000 jet capacity growth would shrink to 4.6% from 6%.



said it sees no reason for the recent drop in its stock price. PolyMedica fell 2 1/4, or 11.8% to 16 7/8 in trading today. Shares have dropped more than 30% from a close of 25 7/16 on Nov. 10.



Federal Aviation Administration

said it would conduct a special audit of


(BA) - Get Free Report

after a string of recent aircraft quality problems, including improperly tightened bolts and parts that failed federal flame tests. The FAA said the inspection would begin Dec.2, and likely run through February.

Delta Airlines

(DAL) - Get Free Report

pilots ratified an agreement for B-777 captains to be paid $250 an hour, and B-767 pilots to be paid $230 an hour.

Integrated Health Service


said the 30-day grace period has expired for the payment on its $150 million, 10.25% senior subordinated notes due 2006, and the company has elected not to make the payment. Integrated had previously announced it is in discussion with lenders regarding debt restructuring.