SmithKline to Merge With Britain's Beecham

SmithKline Beckman Corp. announced yesterday that it has agreed to merge with Britain's Beecham Group PLC, a deal that will create the world's second-largest pharmaceutical company. The announcement ends months of speculation about the future of the Philadelphia-based drug company, which laid off 1,600 employees last fall in the face of slumping sales and has been widely considered a possible takeover target. The new firm, to be known as SmithKline Beecham, will have annual sales in excess of $6.7 billion, trailing only industry leader Merck & Co. in worldwide prescription drug sales and American Home Products in revenue from over-the-counter medicines. (excerpt)

Full text: The Washington Post, Apr 13, 1989

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Market Place; Gold Fields Tests A Complex 'Pill'

''Of course I can't tell you who they are,'' Mr. Lipton said in an interview, ''but several companies are looking at it.'' Explaining his protect preferred defense in a 27-page memorandum to clients, Mr. Lipton, the man who created the ''poison pill'' defense, said the idea was ''particularly appropriate'' for successful companies with sound business plans whose shares are undervalued and are under pressure to restructure. He argued that it ''may be the deciding factor in enabling a company to support a determination that the best interests of the company and its shareholders would be served by the company remaining independent.'' Mr. Lipton said that directors may feel that the company's stock price would indeed rise if it remains independent and pursues its business plan. ''Yet in today's takeover environment, the board of directors often may find that it simply has no time to pursue this value-maximizing alternative,'' he said. ''Quite simply, the board is likely to come under enormous pressure either to sell the company or to restructure now, incurring heavy debt which will force the company to abandon its long-term business plan.''

Full text: New York Times, Apr 17, 1989

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Rate Worries Deal Setback to Stock Rally

''The stock market seemed ready for a correction for two reasons, said Robert E. Walsh, chief portfolio manager for Jenswold, King & Associates in Houston. ''It became appealing after the recent four-day run-up, and option expirations on Friday created a condition where positions had to be unwound.'' Larry Kekst, a senior portfolio manager at the First National City Corporation in Cleveland, said: ''The market's relative strength in the face of bad news on oil prices and worldwide interest rates has to be considered surprising. In looking forward, investors' preoccupation with inflation and its effect on interest rates leave equities vulnerable.''

Full text: New York Times, Apr 21, 1989

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Industrials Edge Up 2.20 Points As GNP Data Make Little Impact

Stock prices rose slightly in lackluster trading, with news of the economy's better-than-expected performance in the first quarter having little impact on prices. Just 146,090,000 shares changed hands on the New York Stock Exchange, compared with the 165,430,000 traded on Tuesday. "It's just a boring, boring grind here," said Guy Cappucci, a block trader at Morgan Stanley & Co. Among broader market averages, Standard & Poor's 500-Stock Index rose 0.18 to 306.93, the Dow Jones Equity Market Index added 0.28 to 288.07 and the New York Stock Exchange Composite Index gained 0.15 to 171.75. Advancing stocks outnumbered decliners on the Big Board by a narrow margin, with 744 issues rising in price and 681 falling.

Full text: Wall Street Journal, Apr 27, 1989

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A General Stationary Stochastic Regression Model for Estimating and Predicting Beta

A beta regression model was proposed in which the coefficients follow a general class of stationary stochastic processes. The procedure identified the processes and estimated the parameters of the model simultaneously from the information in the return series. The returns of each of the Dow Jones 30 securities were analyzed over 60-month estimation periods. The betas of 5 of the securities were nonstationary and did not seem to follow a particular form of nonstationarity. The conclusions of many earlier analyses may be suspect because they were based on procedures tailored to the adoption of a specific form of beta nonstationarity. Therefore, they were based on an erroneous a priori assumption regarding such form. The ordinary least squares model also was found to be quite robust, providing reliable beta and intercept estimates not materially different from the more complex procedure with 25 of the return series.

Full text: The Financial Review, May 1989

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