Brunswick 9 million share block sold

Brunswick 9 million Share Block Sold
18 Sept. 1998

Brunswick's Biggest Holder May Have Sold Entire 9.1% Stake

Dow Jones News Service
18 Sept. 1998
By James P. Miller
LAKE FOREST, Ill. -- Brunswick Corp.'s biggest single stockholder, Boston-based Pioneering Management Corp., may have sold its entire about 9.1% Brunswick stake. A block of 9,083,200 shares traded earlier Friday, crossed by Salomon Smith Barney at $12.25 a share. The only holder with anything more than 5.2 million shares, according to available filings, is Pioneering Management, a unit of investment management company Pioneer Group Inc.

A spokeswoman at Pioneer Group declined any comment on the large trade, citing company policy. A Brunswick spokeswoman similarly declined any comment, beyond noting that the sale didn't necessarily imply that a single buyer would acquire the entire 9 million-share block. Brokerage firms typically take possession of the shares in such large trades and then sell them piecemeal in more easily handled packets.

"There's been a huge turnover in (Brunswick's) stock in recent days," noted A.G. Edwards & Sons Inc. analyst Timothy Conder, pointing to the 2.8 million shares that traded Wednesday and the 2.2 million that changed hands Thursday. Normally, about half a million Brunswick shares trade daily.

Given the punishing slump Brunswick shares have endured recently, Pioneering Management may be licking its wounds from the sale. At year-end, according to Brunswick proxy materials, Pioneering Management had 6,871,900 shares, or 6.91%, of Brunswick's about 99.5 million shares. But, according to Disclosure Inc., Pioneering Management boosted its Brunswick stake during the first quarter of 1998 by a total of 2,174,500 shares, to 9,046,400 shares.

Brunswick shares traded above $35 in the first quarter, and never traded below $27.375 during the period. In June, however, the stock went into a sharp slide from which it has yet to recover. Friday, however, the stock set a new 52-week low of 12, breaking the previous low of $12.75.

The decline in Brunswick's shares was touched off when the maker of boating and recreational equipment warned in mid-June that second-quarter earnings would fall short of expectations because of continued weakness in sales of bowling capital equipment and outdoor-recreation products. Brunswick's substantial sales of bowling products in Asia have been hurt by the region's economic difficulties, which have made it difficult for its customers to obtain credit.

A week after the Midwestern company issued its downbeat earnings forecast, a federal jury found in favor of rival boatbuilders who had sued the company on antitrust issues, and awarded the plaintiffs a total of $133 million. Brunswick, which denies any wrongdoing, is appealing the jury's finding. 

Copyright © 1998 Dow Jones & Company, Inc.

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