Archive | WH Smith

Pacific Equity Partners of Sydney buys Whitcoulls

WH Smith plc said on Friday it had reached agreement to sell its Asia-Pacific business (excluding the Singapore Airport operations) to Sydney-based Pacific Equity Partners for $A115 million ($NZ134.3 million, £47 million).

The businesses being bought consist of WH Smith’s retail businesses in Australia (Angus & Robertson), New Zealand (Whitcoulls and Bennetts) & Hong Kong.

The sale is subject to finance, regulatory approvals & some landlord consents.

WH Smith said the price would represent a significant gain on the carrying value of the assets and would result in an exceptional gain in the 2nd half of the current financial year.

In the year to August 2003 WH Smith’s Aspac Retail business (excluding the Singapore Airport operations) generated £5 million ($NZ14 million) of operating profit and had net assets of £28 million ($NZ79 million) at balance date.

Pacific Equity managing director Rickard Gardell said existing management would stay in place. The transaction should be settled by the end of May.

WH Smith is both cutting back & facing takeover. It reported a £72 million half-year pretax loss on Thursday, said it was slashing staff numbers at its 2 main English offices and, on Friday, agreed to Permira Advisers Ltd undertaking due diligence on what remains of the company.

Sydney-based Pacific Equity Partners was established in 1998 and has more than $300 million of equity funds under management.

Its previous activity in New Zealand includes investing in Frucor Beverages Group Ltd in 2000, exiting on Frucor’s takeover by Group Danone in January 2002, and a similar involvement in Vertex Pacific Ltd, bought from Carter Holt Harvey Ltd and exited through a public offering in July 2002.

A preferred co-investment arrangement with Bain Capital means Pacific Equity can fund more than $1 billion of equity against a single deal. Pacific Equity has 4 managing directors – Mr Gardell & Simon Pillar, both previously at Bain & Co, Paul McCullagh (previously Salomon Smith Barney managing director in Australia & New Zealand) and Tim Sims.

Website: Pacific Equity Partners

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Big loss at WH Smith after indicative bid boosts share price

European private equity advisor Permira Advisers Ltd’s £940 million indicative offer for WH Smith plc, the London parent of Whitcoulls in New Zealand, has been followed by a £126 million turnaround to a £72 million pretax half-year loss after writeoffs.

The bid, at 375p/share, was 44% above last Friday’s closing price and was quickly followed by a 90p price rise at the start of this week.

But today the struggling London-based book retailer announced £75 million of exceptional charges in its home market (including £45 million in stock writeoffs), a £61 million loss on the sale of its US business (including £39 million on goodwill), and confirmed the sale process for its Asia & South Pacific business was under way.

Permira is a European private equity advisor, and advises 18 in-house funds. It bought the Blue Star group in New Zealand & Australia, including Whitcoulls, from US Office Products in 2001. Whitcoulls has 59 stores.

Websites: WH Smith

WH Smith interim result

Permira Advisers Ltd


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