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WH Smith seeks cash to fund Marshall deal
Posted on Thursday, 17 October 2019 10:51
WH Smith, one of the UK’s leading retailers of stationery and books, is seeking GBP 155.00 million in a placing of new ordinary shares to institutional investors to help finance its planned USD 400.00 million acquisition of Marshall Retail Group.

The London-listed business will conduct the sale of stock through an accelerated bookbuild that will be launched immediately, with Barclays Bank and JPMorgan acting as joint underwriters to the deal.

Under the terms of the financing, which represents around 7.0 per cent of the group’s existing share capital, the number of scrips, price and timing of closing will be determined at the bookrunners and WH Smith’s discretion.

Funds will be used in combination with a USD 200.00 million term loan facility, to acquire Las Vegas-based Marshall, which expands the acquiror’s international travel business in the USD 3.20 billion US airport travel market.

Closing of this purchase is subject to shareholder, regulatory and certain landlord approvals and is currently expected to occur in the first quarter of 2020.

In addition to announcing the acquisition and the planned cash call, WH Smith also unveiled its preliminary financial results for the year ended 31st August 2019.

During the 12 months to this date, the company’s travel unit posted turnover of GBP 817.00 million, accounting for 58.4 per cent of its total revenue of GBP 1.40 billion, which was up 11.1 per cent from GBP 1.26 billion in the same timeframe of 2018.

Profit for the year totalled GBP 108.00 million, an unchanged result from FY 2018.

Shares in WH Smith have increased 5.3 per cent to GBP 21.98 at 09:50 today, following the announcements, giving the group a market capitalisation of GBP 2.39 billion.

Founded in 1792 as a family-run newsagent, the business has grown to become one of the UK’s leading retailers, housing around 1,600 stores worldwide and employing some 14,000 staff, primarily in its home country.

Prior to agreeing to buy Marshall, WH Smith’s last acquisition was of InMotion Entertainment, a US-based electronic product retailer, for USD 198.00 million last year.

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