WALL STREET STOCKS/TENNECO INC <TGT> Tenneco Inc, a company that has long been rumored to be a takeover candidate, rose sharply today when speculation surfaced that investor T. Boone Pickens may be targeting the company for an acquisition, traders and analysts said. Tenneco spokesman Joseph Macrum said "we have no comment to make whatsoever." Pickens was not available for comment. Traders noted that activity in the stock increased today after a published report linked Pickens to Tenneco. Tenneco rose two points to 48-3/4. Paul Feretti, an analyst with New Orleans-based Howard, Weil, Labouisse, Friedrichs, Inc, said he was not surprised at market rumors that Tenneco might be the target of a takeover attempt. "It's pure market speculation that Boone Pickens and his group may be interested," Feretti said. "But Tenneco would be a challenge to run because of its sheer size and diversity. Mr. Pickens is a man who likes a challenge." Pickens, who made an unsuccessful attempt to take over Dallas-based Diamond Shamrock Corp <DIA> last winter, has made no secret of his plans to acquire additional natural gas reserves in the belief that gas prices will stabilize sooner than oil prices. Tenneco holds natural gas reserves estimated in excess of 3.5 trillion cubic feet, analysts said. Feretti conservatively estimated Tenneco's breakup value at 58 dlrs a share and said the company generated a cash flow of about 10 dlrs a share "which is probably very attractive to Pickens." Other analysts, however, estimate a breakup value well into the 60 dlr a share range. "I strongly doubt that there is going to be any hostile takeover," Drexel Burnham Lambert Inc's Houston-based analyst John Olson said, putting little credence in the rumors. "Tenneco is a gargantuan enterprise with seven billion dlrs in long-term debt and preferred stock outstanding." He said the buyer would also have to deal with "the intractable problems" Tenneco faces with its farm equipment unit and energy businesses. Analysts suggested that Tenneco could use a number of defensive strategies to fend off an unwanted buyer, such as spin off some of its non-energy businesses directly to shareholders, buy back shares or create a limited partnership out of its natural gas pipeline interests. An analyst who asked to remain unidentified, discouraged the Pickens rumor. "Pickens has a plateful already with his holdings in Burlington Northern and Amerada Hess," he said. "I don't think he would be willing to take on Tenneco's problems with Case (the farm equipment unit), which has been losing about 180 mln dlrs annually and is worth less than a billion dlrs on the market today."