WH Smith joins race for AOL book publishing arm

WH Smith has joined the bid battle for the book publishing division of AOL Time Warner in a deal which could be worth £250m.

WH Smith wants to merge the business with its Hodder Headline publishing division which it acquired in 1999. AOL Time Warner's book division includes the Little, Brown and Warner Books imprints and is home to authors such as Iain Banks and Margaret Atwood.

Smith's has teamed up with CinVen, the venture capital group, to provide equity capital to fund the merger. Smith's, which has long been linked with a US publishing deal, said discussions were at a preliminary stage.

Hodder Headline has a share of about 7 per cent of the UK publishing market and has been successfully moving into "own brand" books on subjects such as cooking and gardening. Smith's said a deal with the Time Warner division would help create "one of the leading transatlantic publishers."

Smith's is likely to face competition from Penguin, part of the Pearson media empire, and from Frank H Pearl, the founder of Pegasus Books. ZelnickMedia, an investment company founded by Strauss Zelnick, the former chief executive of the Bertelsmann music division BMG, is also thought to be interested. Random House, part of Bertelsmann, is also thought to be in the running. HarperCollins, part of News Corporation, dropped out of the race earlier this week.

AOL is likely to move quickly on the deal as it seeks to cut its £18bn debt mountain.

In January shares in Smith's slumped to a 13-year low after the group announced a drop in underlying sales over Christmas. The company said it had made a deliberate decision not to match "kamikaze" pricing of CDs by supermarket rivals and concentrate on building margins instead.

Richard Handover, chief executive, also admitted that an advertising campaign, which focused on brand-building rather than specific products, had not been successful.

Book sales in the Christmas period were down by 3 per cent on the previous year. This was largely in fiction where arch-rival Waterstone's ran strong promotions.

The group's US retail operations have been struggling as the stores are based in hotels and airports where sales have suffered since the 11 September attacks.

Separately AOL Time Warner is reported to be increasing efforts to sell its CD and DVD manufacturing division of its Warner Music subsidiary. Warner Music is one of the music labels linked with a possible merger with the UK's EMI.

WH Smith shares closed 0.25p higher at 246.25p, though its announcement was issued after the market had closed.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine