Shareholder Casts Doubt On Historic Bank’s Future Activist Investor’s Demands Rock Chase Manhattan Corp.

The future of Chase Manhattan Corp., one of the oldest and most well-known names in banking, is in question following an activist investor’s move to force management to change course.

A sale of the bank is possible but unlikely, at least in the short-term, say analysts. But facing demands to improve Chase’s performance by a shareholder holding a 6 percent stake, the elite bank long associated with the Rockefellers may be forced to sell some prized assets or repurchase big quantities of stock to defend itself.

Chase’s foundation was rattled when Michael F. Price, a portfolio manager for a family of mutual funds owned by New Jersey-based Heine Securities Corp., Wednesday revealed that he upped his stake in Chase to 6 percent of Chase’s outstanding stock.

Price is known for shrewdly acquiring stakes in companies with cheap stocks and goading management into making changes to enhance share value. In a filing with the Securities and Exchange Commission, Price implied that Chase’s parts are worth more than its sum and called on management to “consider taking steps to realize the inherent value in its businesses in a manner designed to maximize shareholder value.”

Chase’s shares, which have languished at between $32 and $35 for the last two years, shot up $3.62 1/2, or 9 percent, to $41.62 1/2 Thursday on the New York Stock Exchange.

Officials at Heine said Price was not in his Short Hills, N.J., office. Arjun K. Mathrani, Chase’s chief financial officer, said Price had spoken to officials at the bank Thursday, but declined to comment on the scope of the talks.

Mathrani said Chase has narrowed its focus on core consumer and business banking services and shed bad loans to improve profits and boost its share price.

But analysts said Chase needs to do more. Options include merging with another large bank, divesting some key businesses or buying back stock, they said.