Permira drops plans for WH Smith bid
Private equity firm withdraws over pensions deficit
Permira has abandoned plans to make an offer for WH Smith due to its concerns over the cost of maintaining the retailer’s pension scheme.
Permira’s bidding vehicle, Jamaica, had been given an August 9 deadline by the Takeover Panel to table a formal bid for WH Smith or walk away.
WH Smith pulled out of talks with Permira last month after the firm said it was highly unlikely to make an offer at the 371p-a-share rate at which WH Smith had agreed to open its books.
The trustees of the WH Smith pension plan were insisting that Permira should make a cash commitment up front to cover a shortfall in the fund.
Permira was considering a revised bid through Jamaica, which said today: “There have been several detailed and constructive discussions with the trustees with a view to reaching an arrangement which would enable Jamaica to proceed with an offer for WH Smith.
“Jamaica has also been considering the effect which any such arrangement would have on the financing of any offer for the company.
“Jamaica has now, however, reluctantly decided that it will not be possible to reach an arrangement with the trustees on a basis that would enable Jamaica to make an offer to the shareholders of WH Smith on terms which Jamaica believes would be acceptable to the shareholders of WH Smith.
“Accordingly, Jamaica announces that it will not proceed with an offer for WH Smith.”
Under Takeover Panel rules, Jamaica is now banned from a new approach for six months, unless a new bidder emerges.
[img r]kateswann2.jpg[/img]The decision puts the focus back on WH Smith chief executive Kate Swann ([i]pictured[/i]) and her strategy for restoring sales at the retailer, which has been out of the spotlight since Permira announced its potential bid in April.
The company has exited its overseas retail operations and announced plans to sell off its publishing arm in order to focus in the core UK retail business.
