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Wednesday, February 25, 1998 Published at 14:40 GMT


WH Smith unloads book shop chain
image: [ Waterstones: soon to be part of Europe's largest book and record retailer ]
Waterstones: soon to be part of Europe's largest book and record retailer

WH Smith is to sell its Waterstone's book shop chain to an EMI joint venture for £300m.

The joint venture with US venture capital group Advent International will also buy EMI's HMV music chain and Dillon's book shops for £500m, creating a new retail giant with more than 450 stores.

The new company, to be chaired by Waterstone's founder Tim Waterstone, will be one of Europe's leading retailers of books, music, computer games and videos.

[ image: Dillons also to be sold to joint venture]
Dillons also to be sold to joint venture
Called HMV Media Group, the new company will take in 271 HMV stores, including 105 in the UK, 78 Dillons stores, including Hatchards, as well as the 99 Waterstone's shops in the UK.

The takeover had been well flagged by WH Smith. Last month it confirmed it had been approached by EMI following a decision in October to prepare to float off Waterstone's as a separately quoted company on the stock market.

WH Smith's planned shake-up came in the wake of last year's audacious takeover approach from Mr Waterstone, who stunned the City with plans to buy the entire group.

His approaches were firmly rebuffed, but WH Smith, which has been seen as one of the high street's stragglers, set in motion a major reorganisation exercise. Richard Handover, the WH Smith chief executive, said the group had planned to float Waterstone's, but changed its plans after receiving "a firm offer at a good price".

He added: "Waterstone's is an excellent business and I think this is the best result for shareholders, staff and customers.

"We can now concentrate on developing WH Smith as a mid-market popular specialist retailer with core strengths in books, newspapers, magazines and stationery."

The deal is subject to approval from WH Smith's shareholders and EU competition authorities, which WH Smith anticipates will be obtained by mid-April.


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