Back to the Stradivarius

Cecil King, the autocratic chairman of Britain's International Publishing Corp., once waspishly characterized his protege, Editor Hugh Cudlipp, as "a very good first violin, but never really cast to be a conductor." Nevertheless, when King was deposed in a surprise boardroom revolt in 1968, I.P.C. directors picked Cudlipp as his successor. Ailing I.P.C. continued to flounder, so Cudlipp decided that he ought to turn in his baton and, as he put it, "get out my Stradivarius." Last week the Reed Group, a major British paper manufacturer, received government approval to take over I.P.C. for $304 million in stock and debentures.

The merger, which will create the world's largest printing-publishing-papermaking combine (annual sales: $1.1 billion), will bring a much-needed infusion of management and money to I.P.C. The company publishes the Daily Mirror, Britain's largest daily (circ. 5,000,000), several gaudy Sunday tabloids and 200 trade and women's magazines; it has big holdings in British commercial TV and a 30% interest in Boston-based Cahners Publishing Co., which puts out 37 trade magazines.

Aiding the Competition. As I.P.C. chairman, Cudlipp, former Mirror managing director, and erstwhile boy wonder of Fleet Street, was in trouble from the start. Rather than fire the 1,000-man staff of the Sun (formerly the Daily Herald), which had lost $30 million in an unsuccessful effort to win a youthful readership, Cudlipp last year sold the paper to Rupert Murdoch, an Australian interloper in British publishing. One result was increased competition for the Mirror, I.P.C.'s most profitable property. Most of the company's 13 women's magazines are losing circulation as interest wanes in their homey format--cooking recipes and news of the royal family.

The company's extensive printing business is in the red, and the books division barely survived a bungled attempt to computerize its warehousing and accounting operations. Faced with dwindling resources and lackluster profits despite annual revenues of $416 million, Cudlipp last month invited Reed to step in rather than let I.P.C. fall prey to unwanted takeover. Reed has long had close ties with I.P.C., which at one time owned 44% of the paper company's stock. In 1963, Cecil King himself served as Reed's chairman. The present chairman, Sidney T. ("Don") Ryder, a former financial editor, came from I.P.C.

At Reed, Ryder diversified by buying a large stationery wholesaler, a wallpaper company, a paint firm and a company serving the do-it-yourself market. Under Ryder, Reed's sales have climbed from $307 million to $677 million last year, and profits have doubled to $22 million. Now Ryder's primary job will be to cut the publishing company's losses and mesh the disparate parts of the sprawling enterprise. Cudlipp will remain as a deputy chairman and editorial director. "There will be editorial freedom," says Ryder, "but if somebody goes berserk and the profits of the group are threatened, we will intervene."

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