P.M. BRIEFING : Shearson Stock Price Slides
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NEW YORK — Shearson Lehman Hutton Inc. stock fell sharply today amid reports of a huge recapitalization plan that would inject up to $1 billion into the ailing brokerage.
Shearson was down $1.62 1/2, or about 9.85%, at $14.87 1/2 a share in late New York Stock Exchange trading.
Shearson has been under increasing pressure in recent weeks to take steps to improve its profitability and avoid a credit downgrading that would tarnish the firm’s reputation and increase its borrowing costs.
American Express Co., which owns 61% of Shearson, reportedly is planning a public sale of 10 million to 22 million shares of Shearson stock and a direct investment of about $300 million to raise new capital. In addition, Revlon Inc. Chairman Ronald O. Perelman reportedly is holding talks about buying a 9.9% stake in Shearson for about $250 million.
Lawrence A. Armour, an American Express senior vice president, confirmed his company is “reviewing a number of options” in regard to Shearson. But he said it would be “inappropriate to discuss any details.”
Armour said the review process has been under way for several weeks.
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