WH Smith sets out demerger plans

High street stalwart WH Smith began the process of allowing its retail and news distribution businesses to go their separate ways today.

The London-based company said the demerger move would allow both divisions to benefit from increased focus on their respective strategies.

The proposal, which was first signalled by the company in April, will be put before shareholders in early August with the demerger expected to become effective on August 31. Existing shareholders will receive one share in WH Smith and one share in Smiths News, as the distribution arm will be known.

WH Smith Retail operates 543 high street and 128 travel location stores, while Smiths News provides newspapers and magazines to an estimated 22,000 retailers in England and Wales every day.

Without the link to the WH Smith retail business, the company said it believed the news distribution arm will be able to work more effectively with other retailers who previously viewed the operation as part of a competitor’s group.