WH Smith has completed the sale of its UK high street business to Modella Capital for a smaller valuation than initially agreed.

The retailer had agreed a deal with investment company Modella projected to be worth £79m but has cut the price by £12m following a period of lower trading.

WH Smith revealed that it had entered negotiations to establish revised terms for the transaction, given the original agreement was “no longer deliverable”.

This was after a period of what WH Smith described “softer trading”, resulting in a reduction in the ongoing cash flow of the business, and Modella consequently seeking amendments to the construction of the deal.

WH Smith is now expecting gross cash proceeds of up to £40m – with £10m expected in FY25, up to £20m in FY26, and £10m of deferred tax assets delivered as it becomes payable. This compares to the previous announcement of £52m in gross cash proceeds.

Transaction and separation costs remain unchanged at £27m, taking the value of the completed deal to £67m.

WH Smith said the transaction was still “consistent” with its wider strategic focus on travel retail and would help the firm to create a “pure play global travel retailer” well positioned to capture substantial global growth opportunities, as well as drive enhanced shareholder value.

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