British bookseller and stationer WH Smith Group unveiled plans to split into two separately listed companies focussing on retail and news distribution, boosting its shares today.
The firm said it had not pencilled in a date for the split but planned to list the two parts by demerging its retail arm, with investors likely to receive a share in both of the new companies for every existing WH Smith share they hold.
WH Smith shares were up almost 7 percent at 435-1/4 pence, valuing the firm at around £790 million (€1.38 billion).
"It is not immediately obvious that this might suddenly create additional value for the group as a whole, although it may encourage venture capitalists to take another look at news distribution on a standalone basis," said analysts at Numis Securities.
According to recent media reports, analysts believe the division to be worth around £400 million (€701 million).
Chief Executive Officer Kate Swann told reporters the company had no immediate plans to sell off its news business. "We are being very clear here, we are not putting the "for sale" sign up."
"(But) if somebody wants to put a large amount of money on the table then of course we will take that seriously."
Ms Swann said the move could help the distribution division win new business.
"An independent news distribution business will be more responsive to publisher needs and will be able to work more effectively with other retailers because it will be free of the link to a key competitor."
WH Smith also reported its first-half like-for-like sales had slipped 3 per cent to £1.3 billion.
A concentration on increasing margins through cost savings resulted in a 4 percent rise in pretax profit before exceptionals to £71 million , within the spread of 67 million to 73 million pounds forecast by analysts.
Sales rose 6 per cent at its high street stores to £57 million, stripping out the effect of new and closed stores, with sales at its stores in airports and railway stations up 18 per cent to £13 million.