WH Smith expected to be among first in string of retailers to tap investors for cash after being forced to close lucrative travel business
WH Smith is expected to be among the first in a string of retailers to tap investors from cash after it was forced to close its lucrative travel business last month.
Speculation is rife that it could seek to raise £200 million to £300 million through a shares sale to shore up its balance sheet.
Its share price has dropped 58 per cent in six weeks, cutting its value to £1.2 billion.
Running out of steam: WH Smith’s share price has dropped 58 per cent in six weeks, cutting its value to £1.2 billion
Companies can raise up to 19.9 per cent of their capital without requiring shareholder consent.
But one City source said: ‘Smiths might need more than 20 per cent to make sure it gets this right first time and doesn’t have to come back for more in a prolonged lockdown.’
Retail analyst Jonathan Pritchard at stockbroker Peel Hunt said: ‘This is a highly regarded retailer and investors will be receptive. Long term, investors will see this as an opportunity to buy into WHSmith at an attractive price.’
WH Smith did not respond to enquiries.