Shearson Hired to Study Fluor Unit’s Options

Fluor Corp. said Friday that it has retained Shearson Lehman Hutton Inc. to “explore strategic options” for its A. T. Massey Coal Co., raising speculation that Fluor may be considering a sale of the highly profitable unit.

Fluor spokeswoman Deborah Land would not rule out the possibility that the Richmond, Va., coal company might be sold. “I never say ‘never,’ ” she said.

But she stressed that there are other options for the investment banker to study, including the possible expansion of the unit’s operations or simply maintaining “the status quo.”

Herb Hart, an analyst with S. G. Warburg & Co., said Irvine-based Fluor would be reluctant to sell Massey unless it got an exceptionally good offer. “I think they feel coal is an energy product and Fluor understands energy,” said Hart, referring to Fluor’s longstanding history in the hydrocarbon field. “I think they feel all forms of energy have appreciation potential.”

There is speculation that legislation to fight acid rain could make low-sulfur coal reserves of the kind Massey mines much more valuable.

Hart said he thinks that instead of selling Massey immediately, Fluor “would be much more likely to sell stock in Massey to the public, as they did with the (St. Joe) gold operation, to establish a value for it.”

In 1986, Fluor spun off 10% of St. Joe Gold, its former gold mining unit, in a public stock sale. After testing the market, Fluor the next year sold the rest of St. Joe Gold and other gold properties for $500 million in cash.