WH Smith to merge two share classes

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WH SMITH, the retailer and newspaper distributer, yesterday broke with a 40-year tradition when it announced that it was to merge its two classes of shares.

The group's B shares date from 1949, when it was floated as a public company after the death of its founder Lord Hamilton. They have a nominal value of 10p, a fifth of the 'A' shares but equal voting rights, and were designed to give the family protection after the company went public. They receive only a fifth of the A share dividend, however.

Under proposals that have to be agreed with shareholders, five B shares will be merged to create an A share. As compensation for the loss of voting rights, holders will be given 15 new shares for every 100 B shares held before consolidation.

The B shares closed 1p lower at 119.5p, while the A's rose 2p to 512p.