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Biotech / Medical : Monsanto Co. -- Ignore unavailable to you. Want to Upgrade?

To: Dan Spillane who wrote (1591)	3/12/1999 4:39:00 PM
From: Anthony Wong	Read Replies (2) \| Respond to of 2539

03/12 14:57 Pioneer, DuPont in talks on business combination (Recasts lead, adds analysts' comments paras 4-10, background) DES MOINES, Iowa, March 12 (Reuters) - Leading U.S. seed seller Pioneer Hi-Bred International Inc. <PHB.N> said on Friday it was discussing possible business combinations with chemical company DuPont Co. <DD.N>, marking a sharp reversal in Pioneer's public stance that it wanted to remain independent. DuPont, the largest chemical company outside Germany, acquired 20 percent of Pioneer in late 1997 in a move to become a bigger player in life sciences, and there had been speculation that it was interested in raising that stake. Last year, when DuPont sold 20 percent of its energy unit Conoco Inc. <COC.N>, it indicated it would use the proceeds to invest in its life sciences business. Still, Friday's announcement surprised analysts, who said Pioneer has long maintained its desire to remain independent, and pleased investors, who saw Pioneer's stock surge more than 30 percent on ideas that DuPont would increase its stake. Shares of Pioneer, based in Des Moines, Iowa, were up $7.75 at $32.25 in afternoon New York Stock Exchange trading. DuPont's shares gained 19 cents at $58.31 a share. "Like a 20-year-old man, Pioneer has professed its desire to stay single forever," said John McMillin, who follows the food and agribusiness industries for Prudential Securities. "Today's announcement was a bit of an about-face," he added. "The question is, how far along are they in the courting process? Was this like a first date at the movies, or were they walking to the altar?" In separate but similarly worded statements, Pioneer and DuPont said they would not comment further until an agreement was reached or discussions were terminated. George Dahlman, an agribusiness analyst with U.S. Bancorp Piper Jaffray, said DuPont was most likely interested in acquiring all the remaining shares of Pioneer -- a move that would put it in direct competition with life sciences firm Monsanto Co. <MTC.N>, which last year acquired the second largest seed company, DeKalb Genetics Corp. "It would be my feeling that they're trying to get all (of Pioneer's shares,)" Dahlman said. Renewed market rumors circulated earlier this week about a possible merger of DuPont and St. Louis-based Monsanto, following a news report which said preliminary discussions had been held. At the time, both companies declined comment. Earlier this week, Wilmington, Del.-based DuPont unveiled a plan to create a new tracking stock to show off its life sciences business and said it was actively seeking alliances in the pharmaceuticals industry.