Shearson Weighs Scrapping Its Stock Sale
NEW YORK -- Faced with a weak stock market and a plunging share price, Shearson Lehman Hutton Holdings Inc. is considering dropping plans to sell 20 million common shares, according to investment bankers familiar with the planned offering.</br></br>Shearson had planned to set a price for the new stock this week as part of its plan to bolster its sagging capital base. The securities firm, which is 61%-owned by American Express Co., wants to raise about $850 million, and about $265 million of that was expected to be raised through the common-stock offering, in which American Express would buy three million of the 20 million Shearson shares.</br></br>But since it announced the planned stock sale Dec. 14, Shearson's stock has fallen nearly 30%, from $14.75 to near a record low of $10.50 yesterday in New York Stock Exchange composite trading. The stock fell 37.5 cents yesterday. Shearson went public in 1987 at $34 a share.</br></br>At a closed-door meeting with hundreds of Los Angeles-area Shearson brokers Friday, Shearson Chairman Peter A. Cohen said the firm may be "past the point" at which it's willing to sell stock, according to several brokers who were there. Shearson officials have privately given the same warning to securities-industry analysts, several of the analysts said.</br></br>A Shearson spokesman wouldn't comment yesterday. Shearson officials said they are restricted by federal securities laws from speaking publicly ahead of the planned new offering.