MORRIS PLAINS, N.J. -- Warner-Lambert Co. yesterday split its consumer business into health-care and candy units, a move analysts said could ease the possible dismantling of the company.
The Morris Plains-based maker of the epilepsy drug Neurotin and Trident sugarless gum would be worth more as a divided company, analysts said. Speculation on a split has helped lift the company's stock 12 percent this year.
"It would be easier for Warner-Lambert to divest its non-health care business to Procter & Gamble or one of the other food companies" with the division, said Hement Shah, an independent analyst in Warren, N.J. "There are a lot of food companies that would like to have the confectionery business."
Warner-Lambert's rich cash flow is enough to support a bid of $100 a share or more, analysts said.
Having that much cash could force the company to unleash value by dismantling itself or risk a hostile bid from a drug company that would spin off its candy business, analysts said. The candy unit, which also sells Clorets gums and mints, accounted for 60 percent of the company's 1993 sales of $5.8 billion.