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.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
Caroline Proust as Captain Laure Berthaud in 'Spiral'
tvReview: Gritty, engaging and well-acted - it’s a wonder France’s biggest TV export isn’t broadcast on a more mainstream channel
Arts and Entertainment
music
Arts and Entertainment
Laura Carmichael in still from Madam Bovary trailer
film
News
i100
Sport
Serena Williams holds the Australian Open title
sportAustralia Open 2015 final report
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links
Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing