AMERICAN EXPRESS <AXP> VIEWING SHEARSON OPTIONS
American Express Co, rumored to be
considering a spinoff of part of Shearson Lehman Brothers Inc,
said it is studying a range of options for its brokerage unit
that could improve Shearon's access to capital and help it meet
broadening international competition.
    In a joint statement, American Express and Shearson said
the actions under consideration are an integral part of
American Express' worldwide financial services strategy and
that the two companies have been having both internal and
external discussions on the matters.
    American Express said no decision has been reached on the
strategic options and that it and Shearson could ultimately
decide to follow growth plans already in place.
    Last week, rumors circulated on Wall Street that the
financial services giant was considering a spinoff of part of
Shearson and there was speculation it may be considering
selling a stake to a Japanese firm. Analysts said the
speculation also focused on American Express selling 20 pct of
the profitable brokerage firm to the public.
    There was some speculation that American Express had also
considered a total spinoff of Shearson, but the plan was
considered highly unlikely, analysts said.
     American Express said in the statement on Sunday that it
will not comment on rumors and speculation and a spokesman
would not go beyond the statement. The company also remained
silent last Thursday and Friday, as rumors drove American
Express stock up a total of 5-1/2 dlrs in two days to bring it
to a Friday close at 74.
     It said it issued the statement on Sunday because a
similar statement was being circulated to employees.
    Analysts have been divided on whether it makes sense for
American Express to give up a stake in the wholly-owned
brokerage, which improved its after-tax earnings by about 50
pct in the last year.
    Some analysts said American Express may consider spinning
off part of Shearson because it is concerned that its stock
price does not fully reflect the value of the brokerage firm.
     Shearson contributed 316 mln dlrs of American Express'
1.25 billion dlr net in 1986.
    American Express' ambitious plans for international growth
may be also enhanced by the added cash that spinning out part
of Shearson would bring. Analysts speculated that all of
Shearson would have a market value of about 3.5 billion dlrs.
    To some however, the need for added capital is puzzling.
"(American) Express is in a position where they can raise
capital if they need to," said Larry Eckenfelder of
Prudential-Bache Securities.
    Analysts said rumors were fed by the reorganization of
Shearson management Wednesday. Chief operating officer Jeffrey
Lane got the added, previously vacant, post of president.
     The reorganization also created four new positions for
chairmen of Shearson's operating divisions, a move analysts
speculated would allow Shearson to be a stand alone company.
     Analysts, contacted on Sunday said the statement does
little to clarify last week's market speculation. It does
confirm, however, that the financial services firm, which
unsuccessfully attempted to expand Shearson with a major
acquisition last year, is looking beyond its own walls for
growth and positioning in the global market competition.
    Late last year, Shearson's takeover offer to the E.F.
Hutton Group Inc was rejected by Hutton, and analysts said
there had been speculation that Shearson also was rebuffed when
it approached another major Wall Street brokerage.        
 Reuter
