To Cyanamid, A Buck Made The Difference

One hundred dollars a share didn't quite cut it. At $101, though, American Home Products had a deal. On Aug. 17, after two weeks of resisting, American Cyanamid finally accepted AHP's revised $9.6 billion merger offer--one day after a deadline for the slightly less generous bid had expired. The annual revenues of the combined drug, chemical, and consumer-health-product giant will be more than $12 billion. AHP's expensive chase helped lift depressed drug stocks generally. The biggest gainer was Eli Lilly, whose shares jumped 9% in just two days on rumors that Britain's Glaxo Holdings was pondering a takeover attempt. Some analysts say investors are overreacting, given Lilly's weak development pipeline. Neither company would comment.

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