Wall St. Havoc Batters Local Firms’ Stocks

Southern California stocks were hammered Friday along with the rest of the market, with Hilton Hotels Corp. receiving the worst battering.

Hilton dropped $21.50 a share, to $85, a drop of 20% for the Beverly Hills hotel chain. Hilton’s percentage decline was the second-largest on the New York Stock Exchange, behind only troubled Western Union’s 23% drop.

Hilton is one of several takeover stocks that dropped in the wake of the announcement Friday that the financing had unraveled for the proposed $6.75-billion buyout of UAL Corp., parent of United Airlines. Investors, stock analysts say, are increasingly nervous that it may be an indicator that financing for other takeover deals may fall through as well.

In Hilton’s case, Chief Executive Barron Hilton put the company up for sale this summer. William C. Lebo Jr., the company’s general counsel, said the plunge in Hilton’s stock price would not affect the company’s plans to shop itself around to buyers, but said the UAL announcement clearly triggered the selling in Hilton’s stock.

“I think it’s the stock market virus,” said Lebo, making light of the so-called computer virus that had been touted as a threat on Friday.

Another Southern California takeover-related issue, AMI Inc., fell nearly 16%. The hospital chain’s stock closed at $20 a share, down $3.75. The Beverly Hills hospital chain is the subject of a $1.67-billion buyout bid, and disclosed earlier this week that another two suitors are interested.

Southern California executives largely attributed their stock declines Friday to being swept up in the overall market plunge rather than to any industry developments.

Entertainment issues that fell sharply included Burbank-based Walt Disney, which dropped $7.25 to $123 a share. In fact, trading in Disney shares were halted late in the day because of an imbalance in orders. MCA, the Universal City entertainment firm, fell $6.63 to $62.

Stocks in large California banks also dropped sharply. BankAmerica in San Francisco closed down $2.75 at $32; Security Pacific Corp. in Los Angeles fell $3 to $45; Wells Fargo in San Francisco fell $3.75 to $83 a share, and First Interstate Bancorp in Los Angeles dropped $4.38 to $57.25.

Thrifts fared better. H. F. Ahmanson, the Los Angeles-based parent of Home Savings of America, fell only 87.5 cents a share to $23. Great Western Financial in Beverly Hills dropped $1.75 a share to $21.88.

Aerospace issues were down in varying degrees. Litton Industries in Beverly Hills was down $6.87 1/2 to $85 a share. Rockwell International in El Segundo fell $2.12 1/2 to $22.38. Calabasas-based Lockheed, however, fell only $1 a share to $48. Los Angeles-based Northrop, whose stock has already fallen with the company’s legal and other troubles, was down 62.5 cents to $21.50.

Oil issues were hit hard. Atlantic Richfield in Los Angeles fell $6 a share to $98.25. Unocal in Los Angeles was down $4.13 to $52.50, while Occidental Petroleum in Westwood fell $2.63 to $27.

First Executive Corp., the Beverly Hills insurance firm with a large portfolio of junk bonds, fell $2 a share to $10.25, making it one of the biggest losers in over-the-counter trading. The junk bond market has been in turmoil lately as a result of several troubled issues, such as Resorts International and Campeau.

Columbia Savings & Loan in Beverly Hills, a family-controlled company with a thinly traded stock, fell just 25 cents a share to $7.13, even though Moody’s Investors Service downgraded its rating on Columbia Savings debt because of its extensive junk-bond portfolio.