AHP stock gets injection
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August 18, 1999: 3:15 p.m. ET
Buzz about possible drug merger with UK's Glaxo Wellcome boosts stock
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NEW YORK (CNNfn) - Shares of American Home Products Corp. rallied as much as 11 percent Wednesday amid speculation the drug giant is in talks to merge with Britain's Glaxo Wellcome.
Shares of American Home Products (AHP), of Madison, N.J., rose 2-7/8 to 44-3/4 after hitting as high as 46-5/8, while American depositary receipts of Glaxo (GLX) rose 1 to 52-5/8.
Both companies declined comment on the rumors.
Alex Zisson, a drug analyst at Hambrecht & Quist, said such a deal would be relatively cheap for Glaxo because AHP's shares have been drifting lower in recent months.
Another analyst who spoke on condition of anonymity told Reuters: "There have been some rumors floating around that Glaxo wants to merge with American Home. We've been getting the rumors from hedge funds."
The drug sector has been noteworthy in recent months for companies announcing deals to merge, only to walk away from the altar after financial reviews have taken place.
In early 1998, Glaxo nixed a merger deal with Anglo-British rival SmithKline Beecham (SBH); American Home last fall pulled the plug on plans to merge with chemicals company Monsanto (MTC).
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