Results of capital raise
WHSmith raised £106m gross proceeds through placing of 25m shares at 410p and retail offer.
- Placing shares 25,046,629
- Placing price 410 pence per share
- Gross proceeds £106 million
- Net proceeds £102 million
- Share dilution approximately 20% of existing issued capital
- Expected leverage post-raise around 2x by end of FY26
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Further to the announcement released earlier today by WH Smith PLC ("WHSmith" or the "Company"), the Company now announces the successful pricing of new ordinary shares in the capital of the Company (the "Capital Raise").
A total of 25,046,629 new ordinary shares in WHSmith (the "Placing Shares") have been placed by Barclays Bank PLC ("Barclays"), Goldman Sachs International ("Goldman Sachs") and J.P. Morgan Securities plc, which conducts its UK investment banking activities as J.P. Morgan Cazenove ("J.P. Morgan Cazenove") at a price of 410 pence per Placing Share, with existing and new institutional investors (the "Placing"). Barclays, Goldman Sachs and J.P. Morgan Cazenove are acting as Joint Global Coordinators and Joint Bookrunners (together, the "Banks") in relation to the Placing. Merrill Lynch International ("BofA Securities", or the "Financial Adviser") is acting as Financial Adviser to the Company in relation to the Placing.
Concurrently with the Placing, eligible retail investors have subscribed in the offer made by the Company via RetailBook for a total of 244,000 new ordinary shares (the "Retail Offer Shares") at the Placing Price (the "Retail Offer").
In addition, certain directors and members of management of the Company will subscribe (the "Subscription") for an aggregate of 514,631 new ordinary shares in the capital of the Company (the "Subscription Shares") at the Placing Price pursuant to subscription letters entered into with the Company.
The Placing, Retail Offer and Subscription, which together comprise the Capital Raise, raised gross proceeds of approximately £106 million. The Placing Price represents a discount of 0.5% to the middle market price of 412 pence at the time at which the Company and the Banks agreed the Placing Price. The Placing Shares, Retail Offer Shares and Subscription Shares represent approximately 20% of the issued ordinary share capital of WHSmith prior to the Placing, Retail Offer and Subscription.
An application has been made to the London Stock Exchange plc (the "LSE") for admission to trading of the Placing Shares, the Retail Offer Shares and Subscription Shares on the LSE's main market for listed securities (together, "Admission"). It is expected that Admission will take place at or around 8:00 a.m. on 12 June 2026 (or such later date as may be agreed between WHSmith and the Banks) and that dealings in the Placing Shares, Retail Offer Shares and Subscription Shares will commence at the same time.
The Placing, Retail Offer and Subscription are conditional upon, amongst other things, Admission becoming effective and the placing agreement between the Company and the Banks not being terminated in accordance with its terms.
The Placing Shares, Retail Offer Shares and Subscription Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued ordinary shares of WHSmith, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.
Following Admission, the total number of ordinary shares in issue in WHSmith will be 152,258,405. WHSmith holds no ordinary shares in treasury. This figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, WHSmith under the FCA's Disclosure Guidance and Transparency Rules.
The Company has undertaken that, between the date of this Announcement and 180 calendar days after the date of Admission, it will not, directly or indirectly, issue or allot ordinary shares, subject to customary exceptions or waiver by the Banks.
Related party transaction
Causeway Capital Management LLC ("Causeway") is a substantial shareholder in the Company for the purposes of the UK Listing Rules as a result of being entitled to exercise, or to control the exercise of, 20 per cent. or more of the votes able to be cast at general meetings of the Company. Causeway is therefore considered to be a related party for the purposes of the UK Listing Rules. Causeway has agreed to subscribe for 6,461,433 Placing Shares, amounting to a total subscription of approximately £26 million.
The participation in the Placing by Causeway constitutes a notifiable related party transaction falling within UK Listing Rule 8.2.1R. Accordingly, the Board of Directors of the Company (comprising for these purposes independent directors) confirms that it considers that Causeway's participation in the Placing is fair and reasonable as far as shareholders of the Company are concerned, and that the Board has been so advised by J.P. Morgan Cazenove as Sponsor to the Company.
Subscription
Certain directors, persons discharging managerial responsibilities and other members of management of the Company have agreed to subscribe for Subscription Shares, at the Placing Price, as follows:
| Name | Number of Subscription Shares |
|---|---|
| Leo Quinn | 365,853 |
| Max Izzard | 36,585 |
| Simon Emeny | 2,439 |
| Situl Jobanputra | 3,658 |
| Helen Rose | 12,195 |
| Andrew Harrison | 24,390 |
| Huw Crwys-Williams | 18,292 |
| Ian Houghton | 24,390 |
| Other members of management | 26,829 (in aggregate) |
Herbert Smith Freehills Kramer LLP is acting as legal adviser to the Company in respect of the Capital Raise.
Allen Overy Shearman Sterling LLP is acting as legal advisers to the Banks in respect of the Capital Raise.
Pre-Emption Group reporting
| Name of issuer | WH Smith PLC |
| Transaction details | The Capital Raise of 25,805,260 new ordinary shares comprises the Placing to institutional investors, the Retail Offer to eligible UK retail investors via RetailBook and the Subscription by certain directors and members of management of the Company, and represents, in aggregate, approximately 20 per cent of the existing issued ordinary share capital of the Company prior to the Capital Raise. Settlement for the Placing Shares, Retail Offer Shares and Subscription Shares and Admission are expected to take place on or before 8:00 a.m. on 12 June 2026. |
| Use of proceeds | The net proceeds of the Capital Raise will strengthen the balance sheet, enable continued execution of the Company's growth and transformation agenda, provide greater confidence around the Group's leverage position, and reduce the Group's reliance on debt funding as it executes its long-term growth strategy. Accordingly, the Capital Raise is expected to reduce leverage from the current higher than targeted leverage levels to around 2x by the end of the 2026 financial year. |
| Quantum of proceeds | In aggregate, the Capital Raise raised gross proceeds of approximately £ 106 million and net proceeds of approximately £ 102 million. |
| Discount | The Placing Price represents a discount of 0.5% to the middle market price of 412 pence at the time at which the Company and the Banks agreed the Placing Price. |
| Allocations | Allocations were determined in consultation between the Company and the Banks, and allocations were carried out in compliance with the applicable MiFID II allocation requirements. Where possible, soft pre-emption has been adhered to in the allocations process. Allocations made outside of soft pre-emption were preferentially directed towards existing shareholders in excess of their pro rata entitlements, and wall-crossed investors. |
| Consultation | Prior to launch of the Placing, the Banks undertook a market sounding process, including with major shareholders, to the extent reasonably practicable and permitted by law. |
| Retail investors | The Capital Raise included the Retail Offer, for a total of 244,000 ordinary shares, via the RetailBook platform. Retail investors who participated in the Retail Offer were able to do so at the same Placing Price as all other investors participating in the Placing and the Subscription. The Retail Offer was made available to existing shareholders and new investors in the UK. Investors were able to participate through RetailBook's partner network of retail brokers, wealth managers and investment platforms. As such, to the extent practicable on the transaction timetable, eligible UK retail investors (including certificated retail shareholders) had the opportunity to participate in the Retail Offer alongside institutional investors. Allocations in the Retail Offer were preferentially directed towards existing shareholders in keeping with the principle of soft pre-emption. |
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.