$1.4-Million Takeover of Harcourt Set

General Cinema Corp. agreed today to buy the debt-laden publishing and insurance company Harcourt Brace Jovanovich Inc. in a merger worth more than $1.4 billion.

General Cinema, which operates one of the largest theater chains in the country, had been rumored to be looking for a company to buy.

General Cinema has in excess of $1.6 billion in cash, primarily through the sale of its soft drink bottling business in March, 1989, and the sale last October of its investment in Cadbury Schweppes.

Last fall, General Cinema tried to use its cash pool to buy remaining stock in the Neiman Marcus Group. General Cinema already owns a majority share of the specialty retailer, but the deal fell through.

General Cinema said the purchase of Harcourt Brace Jovanovich, based in Orlando, Fla., will be funded out of its cash balances.

“This merger represents a new beginning for one of America’s great publishing houses,” said John Herrington, chairman of Harcourt.

Peter Jovanovich, president and chief executive officer, said he was “pleased that this merger will help us preserve the company and make it grow.”

Harcourt has been burdened with more than $1 billion in debt, and analysts said a sale was the best hope for the company. As recently as November, the company acknowledged that it was considering selling out.

It amassed a huge debt in a recapitalization in 1987 that was designed to thwart a takeover effort by British publisher Robert Maxwell.

Interest payments due on that debt were scheduled to rise sharply next year, and the company has been exploring its alternatives for several months.

Harcourt, which publishes textbooks and psychological tests as well as trade books, also is an underwriter for life, health and accident insurance. For the months ended Sept. 30, the company reported a net loss of $26.3 million on revenues of $1.4 billion.

General Cinema had revenues of $2.1 billion and net income of $111.3 million for the fiscal year that ended Oct. 31.