General Foods’ Stock Rises on Takeover Talk
The price of General Foods Corp. stock jumped in heavy trading Monday amid investors’ speculation that the consumer products conglomerate might be the target of a takeover by Philip Morris Inc.
General Foods’ stock closed up $7.125 at $87.50 on the New York Stock Exchange as 604,000 shares traded hands. Philip Morris’ stock fell $1.375 to $80.375.
Although such a rumor circulated on Wall Street as long ago as May, one analyst said the acquisition would make sense for Philip Morris’ balance sheet in the face of liability lawsuits filed against the company by smokers suffering from lung cancer and other ailments.
Neither company would comment on the rumor or the stock activity. Thomas McCann, a spokesman for General Foods in Rye Brook, N.Y., said, “Our corporate policy is that General Foods does not comment on rumors about acquisitions . . . under any circumstances.â€
A spokeswoman for New York-based Philip Morris also declined comment.
John A. Baugh, a tobacco industry analyst with Wheat First Securities in Richmond, Va., was not swayed by the heavy stock trading. “I wouldn’t attach any faith to the rumors,†Baugh said.
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