Zenith, Only U.S. TV Maker, Weighs Overhaul

Zenith Electronics Corp. said on Wednesday that it is weighing a major overhaul of the company, and there was immediate speculation that it might sell its television manufacturing business, the last remaining major U.S. producer of televisions.

The company “is continuing to examine all options to restore overall corporate profitability to a satisfactory level,” said Glenview, Ill.-based Zenith.

“Some of those options involve discussions with other firms regarding potential activities in consumer electronics.”

Zenith stock closed at the 1988 high of $25, up $1.375 in heavy New York Stock Exchange trading.

In the statement prompted by the heavy trading, Zenith went on to say that “there is no assurance that any action involving another firm will occur or even be proposed . . . . All of the options being considered would assure that the Zenith brand continues to maintain a leading position in the consumer electronics and personal computer markets.”

Speculation about an imminent restructuring deal mounted during the day when Wall Street sources said that Merrill Lynch & Co. had put Zenith on its “restricted list,” which places limits on trading the stock for their own accounts and disseminating research or touting it to clients.

A brokerage firm normally takes such action to avoid conflicts of interest when it is involved either as an adviser on a deal or issuing securities. Traders said that Zenith commanded particular attention because so many rumors have circulated in recent weeks. Speculation has focused on Zenith spinning off its television manufacturing business. Among the possible suitors mentioned were Philips of the Netherlands, and Siemens AG of West Germany.

James Magid, an analyst and an adviser to Needham & Co., said investors should be wary of the rumors. While it is possible that Zenith would consider selling its consumer products division, where it has been losing money, he said it may be more likely to seek a joint venture with another consumer product company to boost earnings in the money-losing unit.

General Electric Co. last July sold its consumer electronics business to Thomson SA of France. That transaction exchanged GE’s consumer electronics unit for Thomson’s medical unit and cash in excess of $500 million.