The statement came in the wake of Gillette's purchase of $549 million of its own stock from [Ronald Perelman] when the Revlon Group chairman abandoned his hostile takeover bid for Gillette.

According to Wall Street sources, Perelman decided to retreat after Gillette bankers told him that Ralston Purina was willing to buy 20 percent of Gillette's stock. While Perelman only needed a majority of stock to complete the merger, the introduction of a third player made him gunshy, especially after the publicity surrounding Wall Street's insider trading scandal, which indirectly involved Drexel Burnham Lambert, Perelman's investment bank.

Several analysts have upgraded their recommendations since Perelman's retreat. Peter Lynch, manager of Fidelity's Magellan Fund, one of the industry's best performing mutual funds over the decade, said yesterday that he bought 200,000 shares of Gillette two days ago, bringing Fidelity's Gillette position up to 420,000 shares. Lynch said he believes Gillette is fairly valued in the market, and left open the possibility that Fidelity might buy more stock.