Franklin Mutual Advisers Inc. sold 6.94 million shares of Chase Manhattan Corp. in the first quarter, along with large chunks of stock in several other leading financial companies.

In the disclosure, filed with the Securities and Exchange Commission, Franklin reported that it still owned 2.9 million shares of Chase stock as of March 31.

Franklin's selloff comes after Michael Price, the storied stock-picker, turned over day-to-day duties of the Franklin Mutual Series Funds in November to Peter Langerman, chief executive officer, and Robert Friedman, chief investment officer.

Mr. Price is known in banking as the shareholder activist who pressured Chase Manhattan to sell. In 1996, Chemical Banking Corp. bought Chase for $9.9 billion and kept the name.

The fund group also sold 3.6 million shares of Morgan Stanley Dean Witter & Co., reducing its total to 1.4 million shares. Franklin, which is based in Short Hills, N.J., also sold shares of Lehman Brothers Inc. and Bear Stearns Cos.

Susan L. Roth, an analyst for Donaldson, Lufkin & Jenrette Inc., remains bullish on Chase stock, citing factors such as a "strong investment banking pipeline," a comeback of the bank's leveraged finance business, and "controlled expenses."

"I feel quite good about the earnings growth prospects for the company," Ms. Roth said.

Despite the selloff, Chase's stock closed at $81.375 on March 31, up from $71 at yearend. Morgan Stanley's rose to $99.9735, up from $71, and Lehman's to $59.75, from $44.0625. Bear Stearns' stock fell to $35.65625, from $44.6825.

Franklin Mutual is a subsidiary of Franklin Resources Inc. of San Mateo, Calif.

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