U.K. books/music chain WH Smith (WHS) has been approached by two of its former directors with a possible takeover bid. In a statement issued to the London stock exchange, WHS confirms that the prelimi

U.K. books/music chain WH Smith (WHS) has been approached by two of its former directors with a possible takeover bid. In a statement issued to the London stock exchange, WHS confirms that the preliminary approach could lead to a formal offer of 375p per share, valuing the company at £940 million ($1.69 billion). Stock in the publicly listed company closed today (April 19) up 34% to 349.5p after the announcement.

European venture capital firm Permira Advisers has backed the bid and is understood to have teamed with Keith Hammill, chairman of retailer Moss Bros., and Simon Burke, former CEO of London-based toy store Hamleys. Hammill and Burke are both former WHS directors.

WHS' board will discuss the bid at a meeting tomorrow. Recently appointed CEO Kate Swann is expected to announce a slump in group profit when the company unveils its half-year results on Thursday. A spokesperson would not comment on claims that up to 300 staffers would lose their jobs. The staff will be briefed on layoffs tomorrow.

The retailer's sales have eroded in recent months from competition in the marketplace from supermarkets, e-tailers and entertainment specialists. Earlier this year, the retailer signaled its intention to do away with the singles format in favor of focusing its entertainment offerings on albums and DVDs. As yet, no other significant retailers in the United Kingdom have followed suit.

A member of the British Assn. of Record Dealers (BARD), WHS had an 8% market share for singles (value and volume) in 2002, according to the latest published figures from the British Phonographic Industry. According to the trade group, WHS accounted for more than 5% of the British albums market in 2002.