WH Smith completes refinancing amid plans to sell high street arm 

WH Smith has successfully completed a refinancing, which includes its first US Private Placement (USPP) as well as a new bank term loan of £120m, ahead of the group’s potential sale of its high street arm.The £200m USPP notes have a maturity of seven, 10 and 12 years and have been issued on investment grade terms. At the same time, the group agreed a £120m three-year bank term loan with two uncommitted options of extending the loan to four and five years. 

The group said the refinancing will diversify its sources of debt financing and extend its debt maturity profile ahead of the convertible bond maturing on 7 May 2026.

Max Izzard, group CFO, WH Smith, said: “We are pleased to have successfully completed our refinancing, which includes our first US Private Placement and a new bank term loan. 

“The refinancing strengthens our balance sheet, extends our debt maturity profile, and diversifies our capital structure. It also gives the group access to a new debt investor base in the future, and we are pleased to have the continuing support of our banking partners.”

Earlier this month, it was reported that two firms remain in the running to acquire WH Smith’s high street business, with a possible decision coming sometime this spring.

Alteri Investors, which owns Bensons for Beds, and the Hobbycraft and The Original Factory Shop owner Modello Capital are reportedly the two remaining parties vying to seal a deal for WH Smith’s portfolio of over 500 high street stores. 

It is thought that HMV owner Doug Pitman is no longer in talks with WH Smith banker Greenhill, although sources claimed that it has not been ruled out he could return with a new offer. 

Reports were first confirmed that WH Smith was exploring a sale back in January as it looked to restructure the business, which has seen its Travel arm continue to outperform high street outlets in recent years.

At the time, the company said: “WH Smith confirms that it is exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale.  

“Over the past decade, WH Smith has become a focused global travel retailer. The group’s Travel business has over 1,200 stores across 32 countries, and three-quarters of the group’s revenue and 85% of its trading profit comes from the Travel business.” 

It comes as high street profits for the retailer fell by 9% to £39m for the year ended 31 August, which the group said was “in line” with expectations. 

By the end of the year, the high street business operated from 500 stores, while there were 1,200 travel outlets in total. 

It is thought any deal to offload its high street stores could come as early as when it announces its interim results in April.