Chris-Craft Has Experts Baffled

Chris-Craft Industries, the largest shareholder of Warner Communications, has baffled analysts by saying that it might sell a portion of its holdings.

The disclosure--made in a filing at the Securities and Exchange Commission late last week--came one day after Chris-Craft lost a board room vote to block Warner’s sale of $500 million in new convertible preferred stock. The new stock dilutes Chris-Craft’s voting shares to 17.4%, down from 29.1%.

One securities analyst, requesting anonymity, said Chris-Craft’s move looks like “a clear signal that (company Chairman Herbert J.) Siegel would like out; it sounds to me like a deal is in the making.”

But another industry source dismissed that possibility, noting that if Chris-Craft and Warner are negotiating to settle their differences, the companies would have had to disclose such talks in the course of Warner’s recent offering.

Strategically, any sale by Chris-Craft would be puzzling because it would effectively preclude the company from mounting an offense in the next six months. An SEC rule prohibits a director or officer from buying and selling stock during a six-month period, unless he is willing to pay the market price differential to the company. Siegel and five other Chris-Craft nominees sit on the Warner board.

Siegel did not return a reporter’s phone calls, and Warner spokesman Geoffrey W. Holmes declined to comment.