Friday, January 15, 1999 Published at 13:01 GMT
Business: The Company File
WH Smith expands Net business
Helicon: Its encyclopedia has proved a big draw for WH Smith
One of the UK's leading newsagents WH Smith has snapped up another Internet bookshop as it seeks to makes its mark on the Web.
For £5.6m ($8.5m), it has bought the Oxford-based Helicon Publishing.
It means WH Smith can develop its on-line retailing, having already bought The Internet Bookshop last year.
Book-selling has boomed on the Internet with the emergence of names such as Amazon.
Internet adds value
Shares in WH Smith added 9.4% in early dealings as investors decided that the retailer was next in line to catch the Internet bug which has hit high performing shares such as Dixons.
City analysts say it proves WH Smith is serious about being a major player on the Internet.
The group is expected to unveil "slightly disappointing" sales figures at the end of the month.
Recent events have shown that UK investors are becoming as excited about Internet prospects as those in the US.
Dixons this week announced that its free Internet Service Provider, Freeserve, has attracted over 900,000 subscribers in the four months since it was launched, making it the UK's biggest ISP ahead of America Online.
A key part of Helicon's attraction to WH Smith is its reference material, which includes Hutchinson Encyclopedia.
It also intends to sell music, videos and e-commerce services, such as guides to the Internet.
Helicon was bought out by its management in 1992 from the Hutchinson reference division of Random House publishers.
Computer software company Microsoft was sufficiently interested in its CD Rom and Internet capability to take a stake in the company in 1996.
The CD Rom version of its Hutchinson Encyclopedia is seen as a potential rival to Microsoft's Encarta.
Helicon also produced a directory of Web sites, a publication that may prove useful for WH Smith's Internet plans.
The offer values each Helicon share at 94p, representing a premium of 48% to the Helicon share price of 63p at the close of business on Thursday.
The existing Helicon management team has agreed to remain with the business.
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