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Will P&G Upset Upjohn's Match?

Inside Wall Street


Perennial takeover target Upjohn (UPJ) finally found a fiance--Sweden's Pharmacia--after more than a year of rumors. But don't be too sure this wedding will come off without a hitch.

Speculation about a third-party bid may prove to be true. So say some takeover pros, who claim that none other than Procter & Gamble will go after the drugmaker--at a price above Upjohn's current 42. Whispers are that P&G will offer at least 50 a share.

The proposed $6 billion Pharmacia-Upjohn stock-swap merger was based on an Upjohn price of 371/8. Since the Aug. 20 announcement, Upjohn's stock has has been on the rise, indicating that another bidder may have come in. P&G acknowledged that it is striving to be a world leader in prescription and over-the-counter drugs . . . "and we are looking for opportunities in the business," including acquisitions. An Upjohn spokesman wouldn't comment on whether it has received another offer.

One investment banker insists that Upjohn, having announced that it's really for sale, can't reject an offer higher than the Pharmacia bid.

P&G's long-term plan is to expand its pharmaceutical business. It has often told analysts, says one big P&G investor, that it is committed to becoming a world player in health care. Widely known for household cleaning products, P&G also makes and distributes in 60 countries personal-care products, including prescription and over-the-counter remedies.

Upjohn would bring to P&G's medicine chest such products as Xanax for anxiety, Micronase for diabetes, Halcion for sleep disorders, Rogaine for hair loss, and Motrin as an anti-inflammatory.BY GENE G. MARCIAL

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