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Books merger yields windfall of pounds 6m

ONE OF Britain's best-known academic publishers changed hands yesterday, netting its management a pounds 6m windfall.

Routledge, founded 150 years ago and publisher of books and journals such as Addiction and the Journal of Muslim Minority Affairs, has been acquired for pounds 90m by Taylor & Francis, a rival specialist publisher which came to the stock market in May.

The deal marks the end of a courtship of several years that saw each company try to buy the other. Taylor & Francis admitted yesterday that it has had its eye on Routledge for some time, but could not afford to buy the company until it had access to stock market funds. Routledge said it had approached Taylor & Francis over a year ago about a possible takeover deal but had been rebuffed.

The deal yields a significant profit for CinVen, the venture capital group which backed Routledge's management in a pounds 25m buyout two years ago. The biggest single windfall goes to Routledge's chairman, Robert Kiernan. He will receive pounds 1.4m, mostly in shares, and will become non-executive chairman of the enlarged group.

Taylor & Francis is raising pounds 22.7m via a placing and open offer of new shares priced at 193p to help fund the deal. The balance will come from new bank facilities and existing cash resources.

Taylor & Francis said it hoped to achieve pounds 2m of cost savings in the year to December 1999. The savings will come principally from stripping out duplicated functions such as sales forces, buying and head offices. Job cuts are inevitable, but the company did not give a figure.

In the year to June 1998 Routledge reported operating profit of pounds 4.8m on sales of pounds 47m.

Taylor & Francis chief executive, Anthony Selvey, said the companies were a good fit. Routledge is chiefly a book publisher strongly placed in the UK and Europe. Taylor & Francis is strongest in journals with good representation in North America.

"This will be a quantum leap forward for the business, and enable us to build further on the solid foundations that we have," Mr Selvey said.

Taylor & Francis shares close 10p higher at 223.5p.