Reed and Elsevier announced the planned merger on 17 September, the day the pound was withdrawn from the exchange rate mechanism following an irresistible attack by foreign exchange traders. Sterling subsequently fell by 13 per cent against the guilder.
Under the original scheme, Reed Elsevier was to have been owned 50-50 by Reed and Elsevier. A further 11.5 per cent of Elsevier would in effect have given Reed a 56 per cent stake.
Under the revised terms published yesterday Reed will be entitled to only an additional 5.6 per cent of Elsevier, which reduces its share in Reed Elsevier to 53 per cent. Peter Davis, chairman and chief executive of Reed, denied that this meant shareholders had lost out because of sterling's fall.
'Reed will own more than half of a company with a broader business base in both geographic markets and products together with increased exposure to the harder European currencies,' he said. Reed Elsevier will emerge as the second-largest quoted publishing and information group behind Dun & Bradstreet.
News of the revised terms accompanied interim results from Reed showing a 10 per cent increase in pre-tax profits to pounds 94m for the six months to 30 September. Reed shares rose 7p to 582p yesterday.
A key factor was a 60 per cent rise in consumer publishing profits to pounds 33.7m on the back of a sharp turnaround in Reed's television listing products, What's On TV and TV Times.
Professional publishing, including Butterworths legal books, lifted profits 32 per cent, helping to offset falls in UK business publishing, travel and exhibitions.
Reed, which is changing its year-end to 31 December, is forecasting pre-tax profits of pounds 239m for 1992 against a restated 1991 figure of pounds 190m.Reuse content