Rhone-Poulenc "Can't Afford" Cyanamid

Although France's Rhone-Poulenc had been rumored to be interested in making a counter bid for American Cyanamid, for which American Home Products has offered $8.5 billion (Marketletter August 8 and pages 24-25), the French firm says "we have no cash, not for this level of transaction," the Wall Street Journal reports.

R-P chairman Jean-Rene Fourtou is quoted as saying that "we would be more comfortable with smaller, more focused acquisitions because (a big purchase) encumbers the flexibility of the company," which already has a debt level higher than the industry norm, at some 50% of its equity value.