Trouble is, Permira may seem willing to fork out a sizable amount to buy the high street retailer, but the situation isn’t as smooth as you might think. Reports in the press say WHSmith has been slow in releasing the books so Permira can give them the once over for due diligence purposes.
If that’s the case, the spotlight will fall on John Warren – WHSmith’s group finance director. Granted, he hasn’t exactly been the focus of attention so far, but when it comes to the accounts, Warren will be the man most interested in Permira’s conclusions, and whether it goes ahead with its offer of 375p per share.
WHSmith’s corporate website reveals Warren to be an austere-looking man and declares that he trained with Ernst & Young before joining United Biscuits as group FD. A keen motorist, Warren is also a non-executive director at the RAC, a business that’s been through its own fair share of change in recent years.
Change now hangs heavy on the horizon for WHSmith. Whether or not it’s brought about by Permira remains an open question, despite the venture capitalists’ publicly declared interest.
Once the news spread that WHSmith was a good investment, other possible buyers started circling. The national press has been keen to mention Apax Partners, Cinven and CVC Capital Partners.
Such levels of interest puts Warren in a unique position. If Permira is willing to pay so much, someone else may pay more and Warren’s job will be to figure out the best deal for WHSmith shareholders. That’s a tricky job and will require a firm grasp of the figures and, if the media over the past few days is anything to go by, an even firmer grasp of public relations.
So far WHSmith has only coldly acknowledged that Permira is sniffing around.
Still, all the interest will liven up the newsagent after a period of flagging morale. Its performance at Christmas was dismal and CEO Kate Swann was forced to take over the reins after the departure of retail managing director Beverley Hodson. Swann also announced that she was leading a financial review of the company, in which Warren is no doubt deeply involved.
Looking forward, it’s difficult to say how things will go. Permira may settle a deal, or another bidder may come along. Warren is unlikely to be involved in a management buyout – Swann has already denied that will happen. The real question is whether while the potential buyers are circling the management, including Warren, forget to do their core task – sell CDs, books and newspapers.