Maxwell Empire Could Fall Apart

THE chances of the late Robert Maxwell's publishing empire remaining intact following his death Tuesday are virtually nil.That appears to be the consensus among City of London financial analysts assessing the prospects of the two main chunks of Mr. Maxwell's far-flung holdings - Maxwell Communications Corporation (MCC) and Mirror Group Newspapers (MGN). One banking expert put the tycoon's net indebtedness at British pounds2.2 billion ($3.9 billion). When trading in MCC shares resumed Thursday, they fell 63 cents to $1.53. MGN shares rose 73 cents to $2.15 amid speculation that the company, which publishes the London Daily Mirror, may become a takeover target. Details of Maxwell's finances may take months to unravel, according to Valerie Conner, a banking expert with the London finance house Henderson Crosthwaite. "Much of the information was regarded as a family secret, and there is a mystery about the full extent of Maxwell's personal indebtedness and the true condition of his publicly listed companies," she says. Maxwell's two sons, Ian and Kevin, have taken control of the sprawling publishing interests. Ms. Conner estimates Maxwell's private debts at around British pounds800 million. Earlier this year, amid reports that Maxwell's entire holdings were in debt to the tune of British pounds3 billion, he began selling off assets. Among the sales were Pergamon Press, his first major publishing enterprise launched in the 1960s, and TV interests in Britain and France. These sales lowered his indebtedness to the British pounds2.2 billion thought to be outstanding when, it is presumed, he died and fell off his ocean-going yacht Lady Ghislaine as it was cruising at night near Spain's Canary Islands. Kevin Maxwell, the new chairman of MCC, confirmed that more than 50 banks around the world had exposures to his father's companies, and there was no disguising City of London anxiety about the impact of Maxwell's death on the company's fortunes. Bronwen Maddox, a financial analyst with the London Financial Times, said there was concern about the fact that much of Maxwell's private indebtedness was secured by loans on his public companies. "With MCC apparently in trouble, that may mean the banks will take a hard look at Maxwell's private finances," Mr. Maddox said. The prospects of MGN surviving the death of Maxwell were better than those of MCC, according to Conner, who echoed the prevailing view in London's financial district. The group's debt is around British pounds300 million, and the removal of Maxwell's highly interventionist style from the management of MGN was thought to be a reason for the rise in the company's shares on Thursday. At the Daily Mirror a senior journalist expressed fears that MGN might become the target of a takeover bid as other media tycoons, including Rupert Murdoch, took stock of the new situation. Maxwell's holdings in the United States included the New York Daily News, the Official Airline Guides, and the Berlitz language-teaching schools. In Britain, the weekly European newspaper, launched last year, was thought to be at risk. Prior to Maxwell's death there were charges that the multimillionaire publisher and former Labour Party member of the British House of Commons had helped to broker arms deals to Iran during the 1980s Iran-Iraq war, with the knowledge of then-vice president George Bush and Israeli Prime Minister Yitzhak Shamir. The claims were made by Ari Ben Menashe, a former Israeli intelligence officer, in an interview with the London Times. Maxwell, who was born of Jewish parents in Czechoslovakia 68 years ago, had close ties with a wide range of East European political leaders before the collapse of communism. He was also on close personal terms with Mr. Shamir and had newspaper interests in Israel. A week before his death, Maxwell issued libel writs against US journalist Seymour Hersh, who in a new book "The Samson Option" accuses him of having contacts with the Mossad, the Israeli secret intelligence organization, and of being involved in the capture by Mossad agents of Mordechai Vanunu, an Israeli technician who gave the London Sunday Times details of his country's nuclear weapons program and was later tried in Israel and sent to jail.