ChemLawn Corp <CHEM> could attract a 
higher bid than the 27 dlrs per share offered by Waste 
Management Inc <WNX>, Wall Street arbitrageurs said. 
    Shares of ChemLawn shot up 11-5/8 to 29-3/8 in 
over-the-counter- trading with 3.8 mln of the company's 10.1 
mln shares changing hands by late afternoon. 
    "This company could go for 10 times cash flow or 30 dlrs, 
maybe 32 dollars depending on whether there is a competing 
bidder," an arbitrageur said. Waste Management's tender offer, 
announced before the opening today, expires March 25. 
    "This is totally by surprise," said Debra Strohmaier, a 
ChemLawn spokeswoman. The company's board held a regularly 
scheduled meeting today and was discussing the Waste Management 
announcement. She said a statement was expected but it was not 
certain when it would be ready.  
    She was unable to say if there had been any prior contact 
between Waste Management and ChemLawn officials. 
    "I think they will resist it," said Elliott Schlang, 
analyst at Prescott, Ball and Turben Inc. "Any company that 
doesn't like a surprise attack would." 
    Arbitrageurs pointed out it is difficult to resist tender 
offers for any and all shares for cash. Schlang said ChemLawn 
could try to find a white knight if does not want to be 
acquired by Waste Management. 
    Analyst Rosemarie Morbelli of Ingalls and Snyder said 
ServiceMaster Companies L.P. <SVM> or Rollins Inc <ROL> were 
examples of companies that could be interested. 
    ChemLawn, with about two mln customers, is the largest U.S. 
company involved in application of fertilizers, pesticides and 
herbicides on lawns. Waste Management is involved in removal of 
wastes. 
    Schlang said ChemLawn's customer base could be valuable to 
another company that wants to capitalize on a strong 
residential and commercial distribution system. 
    Both Schlang and Morbelli noted that high growth rates had 
catapulted ChemLawn's share price into the mid-30's in 1983 but 
the stock languished as the rate of growth slowed. 
    Schlang said the company's profits are concentrated in the 
fourth quarter. In 1986 ChemLawn earned 1.19 dlrs per share for 
the full year, and 2.58 dlrs in the fourth quarter. 
    Morbelli noted ChemLawn competes with thousands of 
individual entrepreuers who offer lawn and garden care sevice. 
 Reuter