Magazine article Information Today

Blackwell Publishing in Dynasty-Style Dispute. (News Break)

Magazine article Information Today

Blackwell Publishing in Dynasty-Style Dispute. (News Break)

Article excerpt

Blackwell Publishing is engulfed in a family feud fit for a Dynasty plot. In the latest twist to an increasingly embarrassing public row, shareholder meetings of both Blackwell Publishing and sister company Blackwell, Ltd. (the separate book-selling and distribution company) were recently canceled at the last minute, leaving the privately held U.K.-based academic journal and book publisher looking even more rudderless and adrift.

At the time of this writing, no one at Blackwell Publishing was prepared to talk to Information Today, but the dispute apparently follows last year's merger of Blackwell Publishers (which concentrated on the humanities) with Blackwell Science. Due to the resulting integration costs, the internal profit-related formula used to price the shares in Blackwell Science (which are not publicly listed) fell from $22.42 to $12.16, upsetting many family members who were hoping to sell some of their holding.

In response, 74-year-old former chairman Toby Blackwell-whose grandfather founded the Blackwell group in 1879--has been leading a campaign to force a trade sale of the publishing business. However, his nephew and current chairman of Blackwell Publishing, Nigel--along with Toby's son, Philip--are said to favor supporting the recently appointed managing director, Rene Olivieri, in his bid to turn the company around and then go for an IPO in 3 years.

Due to the complex ownership structure of the company, the situation appears to be testing family loyalties to the limits and has deadlocked a decision on the long-term future for the company.

Toby Blackwell, who is president of Blackwell, Ltd., claims to own 30.1 percent of the voting shares of Blackwell Publishing, as well as 64 percent of Blackwell, Ltd., which in turn owns 9.3 percent of the Blackwell Publishing voting shares. Toby also claims the support of his son James, who has a 5.3-percent stake, and other individuals holding a further 7.5 percent.

On the other side of the barricades, Nigel owns 42.3 percent of the voting shares, and another 5.3 percent is held by Philip, who is rumored to be supporting the Blackwell board. In total there are said to be around 50 family members with voting shares.

An attempt was made to resolve matters in February, when independent corporate adviser Morgan Stanley was appointed to advise the board on its options. This only served to further inflame the situation, however, when Toby discovered that the intention was to give Morgan Stanley a specific brief to come up with options for keeping the company independent.

In March, in a further twist, U.K.-based publisher Taylor & Francis announced publicly that it had made an offer to buy Blackwell Publishing. "We made a public offer of [$438.5 million] to the Blackwell Publishing board, and we are still waiting for a considered response," said David Smith, Taylor & Francis CEO. "The family are at the moment in discussions, but they haven't given any indication other than to say that the EGMs and AGMs due to be held last week have been adjourned for a further 3 weeks."

The current situation threatens to distract the company at a critical juncture. With the industry in quick-fire consolidation mode, important decisions need to be made urgently. To its credit, the Blackwell board has continued to make strategic decisions despite the uncertainty. In April, for instance, it announced that it had acquired U.S.-based medical publisher Futura Publishing, which specializes in cardiology and vascular diseases.

For customers faced with buying decisions, the situation has become increasingly confusing--a confusion that has also spread to erstwhile Blackwell partner Swets & Zeitlinger. …

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