HARCOURT <HBJ> MUM ON REED <REED.L> RUMORS
Harcourt Brace Jovanovich Inc officials
were not available for comment on market rumors that it is
interested in acquiring Reed International plc <REED.L>.
    Officials of First Boston Inc, Harcourt's financial
adviser, declined comment.
    A Wall Street arbitrageur, who owns Harcourt shares, said
the rumors did not make much sense because Harcourt has
announced a recapitalization plan to ward off a takeover
attempt by British publisher Robert Maxwell."It's completely
inconsistent with the recapitalization, the only way is if they
drop the recapitalization," he said.
    Calls to Harcourt seeking comment were not returned.
    Harcourt's recapitalization will come under scrutiny of a
U.S. Court in Orlando, Fla. Monday. The company has sought a
declaratory judgment on convertibility of debentures due 2011
in light of the recapitalization.
    Harcourt said in a statement this week that Salomon
Brothers Inc <SB> and Mutual Shares Corp have intervened in the
case, claiming ownership of more than 30 mln dlrs face amount
of the debenture. In addition, British Printing and
Communications Corp, headed by Maxwell, owns 9.5 mln dlrs face
amount, Harcourt said.
    Salomon said in a filing with the Securities and Exchange
Commission today that it has 21,978 of the debentures. If the
court decides they should be converted at par value of one dlr,
they could be converted into 22.0 mln shares.
    Harcourt is asking the court to rule the company is not
required to issue common to debenture holders who did not
convert prior to June eight.
    An increase in Reed shares in London today was attributed
by brokers to rumors of Harcourt's interest and also to rumors
that Maxwell might be a buyer. But an adviser to Maxwell in New
York said "there's no basis to think that it's us."
 Reuter
