Company Cancels Shareholders Meeting; Studies Takeover Offer
ORLANDO, Fla. (AP) _ Harcourt Brace Jovanovich Inc. surprised a roomful of shareholders Friday by canceling a special meeting and announcing it was evaluating a takeover bid from a company controlled by a British publisher.
HBJ had called the meeting prior to Robert Maxwell’s $2 billion offer to buy the company, this country’s largest textbook publisher. HBJ also owns the Sea World marine parks and an insurance company.
HBJ Chairman William Jovanovich and the rest of the 15-member board of directors met in a nearby conference room, but officials said there would be no announcement of any outcome of their closed-door discussions.
On the New York Stock Exchange, HBJ fell $2.37 1/2 a share to close at $43.37 1/2 , slightly below the $44-a-share bid from Maxwell’s company.
Shareholders had been asked to approve a management proposal to double the authorized number of shares of common stock to 100 million.
The company said it wanted to raise cash to pay debt incurred for recent acquisitions and to improve its credit standing.
HBJ lost $27.7 million on sales of $331.3 million in the quarter ended March 31.
Lawyer Charles Harris read an announcement to about 200 shareholders gathered at the Orlando-based company’s headquarters. It said 64 percent of the shareholder proxies received had instructions to vote in favor of the share authorization proposal. A simple majority of the company’s 39.4 million shares outstanding would have been needed for approval.
However, HBJ spokeswoman Margaret Mary McQuillan said the cancellation of the meeting meant there was no official vote cast on the share authorization proposal.
Some shareholders were angered by the abrupt cancellation.
″We didn’t get a chance to ask any questions or anything,″ said shareholder Howard Goldsmith. ″They had the proxies. They had what they wanted.″
″We should have had a chance to get some information,″ said Murray Gilbert, who added that he was opposed to selling the company to Maxwell.
Maxwell’s British Printing & Communication Corp. offered $44 a share for the HBJ stock Monday. Jovanovich has called the offer ″preposterous.″
Maxwell said the offer was contingent upon no new shares being issued.
Securities analysts said the shareholders’ vote on authorizing new shares was unlikely to have much impact.
″Maxwell will ignore it, even if the measure passes,″ said J. Kendrick Noble, an analyst at PaineWebber Group in New York. ″I think this company will be acquired.″
Maxwell has said he is anxious to meet with Jovanovich ″to discuss the price,″ but the HBJ chairman has not responded.
Jovanovich, the 67-year-old son of a coal miner, joined the company in 1947, became president in 1954 and chairman in 1970. Critics describe him as unorthodox and domineering, but others say he has been an effective executive. He moved company headquarters from New York City to Orlando beginning in 1982.
About 56 percent of HBJ’s $1.3 billion in revenue last year came from its publishing operations, which include educational, children’s and general interest books as well as scientific and medical books and journals.
It proposed a $220 million buyout of Harper & Row Publishers Inc. earlier this year, but was outbid by Rupert Murdochs’ News Corp.
HBJ reported a profit of $70.5 million in 1986 on revenue of $1.3 billion. It employed about 16,000 people at the end of the year.
British Printing had a pretax profit of $135 million on revenue of $775 million in 1986 while employing 12,600 people worldwide. In addition to heading British Printing, Maxwell is chairman of Mirror Group Newspapers Ltd., based in London.