WH Smith jettisons Asian business, faces takeover bid

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The ailing news and books business accepts a generous offer for its Asian operation as Permira moves in on the group

WH Smith has sold its Asia/Pacific retail operation to Pacific Equity Partners, a private equity group based in Sydney, for £47m after admitting it was reviewing the business in January. The deal includes the news and books specialist's operations in Australia, New Zealand and Hong Kong, but excludes the Singapore Changi airport business. The Asian operation (excluding Changi) made a £5m profit in the year to August 31, 2003.

The offer, which includes airport concessions in Australia, New Zealand and Hong Kong, is higher than analysts expectations, which valued the business at between £30m-£40m. The retailer announced dismal interim results earlier this week, although it said that UK travel-retail was performing strongly, and another private equity firm, is understood to have placed a £940m offer for the whole group.

The decision to sell its Asia business comes less than six months after WH Smith sold its US airports business to Hudson Group, a speciality travel retailer and north America's largest duty-paid airport concessionaire.