WH Smith snubs Waterstone and announces its own break-up plan

Troubled retailer WH Smith has dealt a double blow to Tim Waterstone's restructuring proposals by rejecting his revised plans and announcing its own blueprint for the future. This includes demerging the Waterstone's bookselling business, selling Virgin-Our Price and revitalising the core high street chain. Nigel Cope, City Correspondent reports on an apparent change of heart.

WH Smith's plans for a break-up come just two months after Jeremy Hardie, the WH Smith chairman, ruled out such a course of action. At the time of the company's full year results in August he said: "We have no plans for a break-up ... What you don't do is thrash about changing things."

However, he denied yesterday that there had been any volte face, saying that plans to reshape the Smiths portfolio had been under consideration for several months. "This is not the kind of thing you do on the hoof. It has been going on for a considerable period of time." He admitted that Mr Waterstone's intervention had acted as "a spur and a catalyst" that had pushed the board to act.

Mr Hardie said the Smith board had been unanimous in its rejection of Mr Waterstone's proposals, saying they were not in the best interest of shareholders. Mr Waterstone said he was "genuinely saddened" by his second rejection in a fortnight and that he had no plans to put his proposal to shareholders. However, he added that if shareholders thought after time that they supported his "vision" for WH Smith he would be willing to discuss his proposal again with the board.

WH Smith share's rose 3.5p to 405.5p on the news, though the proposal met with a mixed reception from analysts. Nick Bubb of Societe Generale Strauss Turnbull said: "It looks likes Tim Waterstone is dead in the water. It was always obvious that Smith's would steal his best ideas and put them into practice themselves." However, another analyst described Smith's plans as "woolly" and "unfocused."

The key parts of the strategy are to de-merge the Waterstone's business into a separate quoted company. This should be completed by next Spring with analysts putting a value of around pounds 300m on the business.

The music operation including the Virgin-Our Price business and the Wall division in the US will be sold. Analysts said Virgin-Our Price could be worth around pounds 150m with Virgin having options to buy it.

Smiths will then concentrate on three business, its core WH Smith chain which accounts for 30 per cent of sales and operating profits and which it hopes to revitalise; the cash-generative news distribution business, and the international and UK travel interests.

News
peopleChildren leave in tears as Santa is caught smoking and drinking
Arts and Entertainment
A host of big name acts recorded 'Do They Know It's Christmas?' in London on Saturday
musicCharity single tops chart
Arts and Entertainment
Steve Backshall has become the eighth celebrity to leave Strictly Come Dancing
tv
News
people
PROMOTED VIDEO
News
ebooksNow available in paperback
Arts and Entertainment
tvStrictly presenter returns to screens after Halloween accident
News
peopleFormer civil rights activist who was jailed for smoking crack cocaine has died aged 78
News
i100
News
Boxing promoter Kellie Maloney, formerly known as Frank Maloney, entered the 2014 Celebrity Big Brother house
people
Sport
Dwight Gayle (left) celebrates making it 1-1 with Crystal Palace captain Mile Jedinak
premier leagueReds falter to humbling defeat
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

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin