UK - Venture capital group Permira has ditched plans to make a renewed offer for WHSmith after failing to reach a compromise over the pension deficit.
It is the second time Permira’s ambitions have been thwarted by the retail giant’s scheme deficit. An earlier offer, worth around £940m, was dropped after the trustees insisted that making up the £215m shortfall be included as part of any bid.
In the lead up to a second bid being made, the trustees agreed to accept a payment of £150m after the private equity manager asked backers to give the scheme equal status as a creditor.
However, Permira said subsequent talks with trustees had left it unable to make an acceptable offer to shareholders.
Any bid made by Permira would have come through its Jamaica Trading fund, which is backed by banks and other private equity firms.
Permira said: “There have been several detailed and constructive discussions with the trustees with a view to reaching an arrangement that would enable Jamaica to proceed with an offer for WHSmith. Jamaica has now, however, reluctantly decided it will not be possible to reach an arrangement with the trustees.”
WHSmith said it would now pursue its own restructuring plan, which looks set to include selling off publishing business Hodder Headline. Trustees have asked that part of the proceeds from the sale be used to help plug the deficit.
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