Criterion Group's Plan to Go Public Is Viewed Warily by Other Fund Management Concerns
Anyone for Criterion Group shares?</br></br>Charles Miller, chairman of the big Houston money management firm, wants to cash in some chips. While he's a popular figure on the investment scene, even some of his peers don't want to be on the receiving end of the company's initial offering.</br></br>When the stock market looks healthy enough, Criterion plans to sell to the public 1.6 million common shares, about a 21% stake, for $21 to $24 apiece. Management will sell about one million of the shares -- an unusually high proportion of insider selling. At a $22.50-a-share offering price, the company would get $13 million of total proceeds of $36 million.</br></br>Mr. Miller will sell about 514,000 shares, cutting his stake to about 23%. He'll get about $11.5 million in cash, and his remaining holdings will be valued at about $38.5 million. But he won't be surrendering many votes to outside investors. Criterion has two classes of common shares, one carrying 20 times as many votes as the other. After the offering, Mr. Miller will have 86% of the votes.</br></br>The money manager may be selling at the right time. Since 1985, Criterion's revenue and profit have surged because of strong mutual fund sales. In the first half, its U.S. Government High Yield Trust alone accounted for 44% of revenue of $25.4 million. If interest rates rise, Criterion's customers could withdraw money, "eroding commissions and fees," says Bob Natale, editor of Standard & Poor's new-issue newsletter.