Takeover Talk Sends Price of SmithKline Stock Higher

PHILADELPHIA — Rumors that SmithKline Beckman Corp. is about to become a takeover candidate have swirled around the big pharmaceutical company, jacking up the price of its stock substantially.

“I am taking it (buyout speculation) seriously,” said Kidder Peabody analyst Stephen Buell, noting that more than 10 million SmithKline shares have traded in the past week. “The adage that wins out most often is ‘where there is smoke, there is fire.’ ”

SmithKline’s stock, which is up about $5 a share from last week, fell $2.25 to $50.25 Friday after Ciba-Geigy AG, one of the rumored suitors, issued a statement from Zurich, Switzerland, denying that it was building a stake in SmithKline.

Provident National Bank drug analyst Rita Freedman said Philadelphia-based SmithKline was especially attractive as a breakup candidate because its parts were worth more than the whole.

Among those parts are two subsidiaries based in Orange County--Beckman Instruments and Allergan--and a clinical laboratory in Van Nuys.