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AHP could raise bid
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November 30, 1999: 3:00 p.m. ET
Indicates it would ‘work with Warner-Lambert’ if Lipitor suit prevails
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NEW YORK (CNNfn) - American Home Products Corp. signaled Tuesday that it might increase its offer for merger partner Warner-Lambert Co. if Warner-Lambert wins a court battle against rival bidder Pfizer Inc. over the hot-selling cholesterol drug Lipitor.
In a letter to Warner-Lambert, AHP said it is "prepared to work with Warner-Lambert to provide a mechanism, consistent with our existing merger agreement, for fairly allocating to Warner-Lambert’s shareholders additional value ultimately created by the recovery of the marketing rights to Lipitor.”
American Home Products spokesman Lowell Weiner said the company was not prepared to sweeten its $71 billion merger arrangement with Warner-Lambert now, but that "assuming that Warner Lambert did prevail” in the Lipitor suit against Pfizer, "then we would be prepared to work with them.”
Warner-Lambert, trying to ward off an unfriendly takeover bid from Pfizer, sued Pfizer Monday to try to break up their joint marketing agreement over Warner-Lambert’s Lipitor, which is expected to generate about $3.6 billion in revenue this year.
Warner-Lambert claims that Pfizer improperly used information about the drug as it crafted its $82.4 billion bid for Warner-Lambert. Monday’s lawsuit, filed in Delaware Chancery Court, follows an earlier suit by Pfizer that claims Warner-Lambert violated the Lipitor pact through its merger arrangement with American Home Products.
Independent pharmaceutical analyst Hemant Shah said Tuesday that American Home Products is indicating that "they’re willing to give a higher price if Warner-Lambert gets Lipitor back.”
However, "that’s a big ‘if,’ ” he said.
Analysts say that Warner-Lambert is on shaky ground in calling for a halt to the Lipitor alliance because Pfizer has used its marketing power to build sales for the drug. They also question whether Warner-Lambert can prevail in court.
In Tuesday afternoon trading, Warner-Lambert (WLA) shares fell 1-11/16 to 89-11/16. American Home (AHP) stock slipped 11/16 to 51-13/16 and Pfizer (PFE) lost 7/8 to 36-9/16. 
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