Posting of Circular

Smith WH PLC
27 August 2004

                                                                  27 August 2004


                                  WH Smith PLC

  Posting of circular regarding disposal of Hodder Headline Limited, return of
              cash to shareholders and management investment plan


WH Smith PLC ('WHSmith' or the 'Company') announces that it is posting a
circular to its shareholders in connection with the disposal of Hodder Headline
Limited ('Hodder Headline') to HL 99 Limited (a wholly-owned subsidiary of
Hachette Livre SA), the return of £207m of cash to ordinary shareholders and a
management investment plan.

Disposal of Hodder Headline

As announced on 2 August 2004, WHSmith has reached an agreement to dispose of
its publishing business, Hodder Headline, to Hachette Livre SA, the
book-publishing arm of Lagardere S.C.A, for £223m, comprising £210m in cash and
the assumption of the Hodder Headline net pension deficit estimated at £13m.

Completion of the disposal is conditional on certain regulatory approvals and
approval by shareholders. Completion is expected to take place on 25 September
2004, at which time Tim Hely Hutchinson, who will become Chief Executive of
Hachette Livre UK Books Group in addition to continuing as Chief Executive of
Hodder Headline, will resign as a Director of WH Smith PLC.

Hodder Headline has performed strongly under WHSmith's ownership and this
performance has continued in the current financial year. Following the
completion of the disposal of Hodder Headline, the WHSmith Group will have been
significantly simplified and refocused on its core retailing and news
distribution activities.

Return of Cash to shareholders

The net cash proceeds from the disposal of Hodder Headline will be used to fund
a return of cash to shareholders of £207m or 85p per ordinary share. The return
of cash is to be implemented through an issue of C shares and a capital
reorganisation and is subject to approval by shareholders. Ordinary shareholders
will receive, for every existing ordinary share, a C share which will have a
nominal value of 85p.

Ordinary shareholders will be able to elect between the following alternatives
for their C shares:

Repurchase offer: to sell some or all of their C shares for 85 pence per C
share, free of all dealing expenses and commissions. The repurchase offer is not
being made in the United States and shareholders in the United States may not
elect for the repurchase offer; or

Initial C share dividend: to receive a single dividend of 85 pence per C share
for all of their C shares, following which all of their C shares will
automatically be converted into deferred shares which will have negligible
value. United States shareholders may elect for this alternative.

Election forms in respect of these alternatives are expected to be sent to
ordinary shareholders on 27 September 2004. Ordinary shareholders who do not
elect for either of these alternatives will retain their C shares.

In order to reflect the return of cash, a capital reorganisation will be
undertaken whereby existing ordinary shares will be consolidated so that
ordinary shareholders will receive 18 new ordinary shares for every 25 existing
ordinary shares they own at the close of business on 24 September 2004. The
intention is that, subject to normal market movements, the share price of one
new ordinary share immediately after listing should be approximately equal to
the share price of one existing ordinary share immediately beforehand. New
ordinary shares will be traded on the London Stock Exchange in the same way as
existing ordinary shares and will be equivalent to the existing ordinary shares
in all material respects, including their dividend, voting and other rights. The
effect of the consolidation will be to reduce the number of issued ordinary
shares to reflect the return of 85 pence per share, but ordinary shareholders
will own the same proportion of WHSmith as they did previously, subject to
fractional entitlements.

A number of changes to the Articles of Association of the Company are required
in order to implement the return of cash including an amendment to the limit on
the Company's borrowing powers. The proposed amendment would allow the Company
to borrow up to a maximum of £300m. The amended borrowing limit will be subject
to regular review by the board of directors.

Full details of the return of cash and associated capital reorganisation are
contained in the circular.

Management Investment Plan

The management investment plan will provide the executive directors and selected
members of senior management (initially comprising approximately 40 people) with
the opportunity to demonstrate their commitment to, and belief in, the plans for
the WHSmith Group by investing their own money to buy shares. Participants will
be granted a matching award over new ordinary shares which will only be
exercisable provided that certain demanding corporate performance conditions are
met, their investment is retained over a period of three years and they continue
to be employed by the Company. The management investment plan is subject to
shareholder approval.

The executive directors will be able to invest 100 per cent of gross salary and
the senior management team will be able to invest up to a maximum of between 30
and 75 per cent of gross salary.

The extent to which a matching award vests is 50 per cent. dependent on the
achievement of an earnings per share performance measure and 50 per cent.
dependent on the achievement of a total shareholder return performance measure.
Achieving the threshold performance level (described below) under these two
performance measures will result in a matching award of shares to the value of 2
times the original investment for executive directors and 1.5 times for other
executives. Achieving the maximum performance level (described below) under
these two performance measures will result in a matching award of shares to the
value of 5 times the original investment for the executive directors and 3 times
for other executives. Between threshold and maximum performance levels matching
awards vest on a straight line basis. In view of their higher level of
participation, executive directors will not be eligible to receive awards under
the WHSmith 2004 Long-Term Incentive Plan in the financial year ending 31 August
2005, nor did they receive such awards in the financial year ending 31 August
2004.

Under the EPS performance measures, the threshold performance level will not be
met unless the compound rate of growth in fully diluted earnings per share
(before goodwill amortisation and exceptional items) equals Retail Price
Inflation plus 20 per cent per annum over the three years ending 31 August 2007.
The maximum performance level will only be met if the compound rate of growth in
fully diluted earnings per share (before goodwill amortisation and exceptional
items) equals or exceeds Retail Price Inflation plus 30 per cent. per annum over
the same time period.

Under the TSR performance measure, the threshold performance level will not be
met unless the Company delivers value per share equivalent to that achieved from
a notional investment of 354 pence in the FTSE All Share General Retailers Index
('Index') over the period between the date of grant of the matching award and
the announcement of the Company's results for the year ending 31 August 2007.
The maximum performance level will only be met if the Company delivers value per
share equivalent to that achieved from a notional investment of 449 pence in the
Index.

Examples of TSR percentage targets, assuming the return on the Index averaged
7.5% over the performance period, are shown below:

                                                          Threshold   Maximum

Target investment value for payout under the plan in 3     440p(1)    557p(2)
years
TSR percentage targets from share price of 305p           13% p.a.    22% p.a.

Notes:
(1) Calculated as notional investment of 354 pence increased by 7.5% per annum
    for 3 years.

(2) Calculated as notional investment of 449 pence increased by 7.5% per annum
    for 3 years.

Full details of the Management Investment Plan are contained in the circular.


Amendment to Sharesave Scheme

It is also proposed to amend the rules of the WHSmith Sharesave Scheme 1999 to
remove a limit on the number of shares that may be issued or be issuable under
the Sharesave Scheme, which is no longer required by institutional shareholders'
guidelines.

Group Prospects

It is anticipated that the WHSmith Group will perform in line with expectations
for the financial year ending 31 August 2004.

The combination of the strong performance of the News Distribution and UK Travel
Retail businesses together with the anticipated recovery in the profitability of
the UK High Street Retail business gives the Board confidence in the ability of
the WHSmith Group to make progress from its current position into the future.


Shareholder Meetings

An extraordinary general meeting ('EGM') is being convened for 12.00 p.m. on
Thursday, 23 September 2004, to seek ordinary shareholder approval for, inter
alia, the disposal of Hodder Headline, the return of cash to shareholders, the
related amendment to the Company's borrowing limit, the management investment
plan and the amendment to the Sharesave Scheme. A class meeting has been
convened for 12.05 p.m. (or, if later, the conclusion of the EGM) on Thursday,
23 September 2004 to seek approval for the amendment of the Company's borrowing
limit from the holders of the Company's 5.75% cumulative preference shares.


Expected Timetable of Principal Events

Latest time and date for receipt of form of proxy for EGM          12.00 p.m. on
                                                                    21 September
                                                                          2004

Latest time and date for receipt of form of proxy for class        12.05 p.m. on
meeting                                                             21 September
                                                                          2004

EGM                                                                12.00 p.m. on
                                                                    23 September
                                                                          2004

Class meeting                                                      12.05 p.m. on
                                                                    23 September
                                                                          2004

Latest time for dealings in existing ordinary shares                    close of
                                                                  business on 24
                                                                 September 2004

Record date for the capital reorganisation                              close of
                                                                  business on 24
                                                                 September 2004

Completion of the disposal of Hodder Headline                       25 September
                                                                          2004

New ordinary shares and C shares admitted to the Official List   8.00 a.m. on 27
and admitted to trading on the London Stock Exchange's market    September 2004
for listed securities

New ordinary shares and C shares entered into CREST              8.00 a.m. on 27
                                                                 September 2004

Dealings in the new ordinary shares and C shares commence           27 September
                                                                          2004

Despatch of election forms and certificates for new ordinary        27 September
shares and C shares                                                       2004

Latest time for receipt of election forms in relation to the C     12.00 p.m. on
share alternatives                                               26 October 2004


Brokers to make repurchase offer by means of an announcement on  27 October 2004
a Regulatory Information Service and C shares of shareholders
who accept the repurchase offer repurchased

Initial C share dividend declared and C shares in respect of     27 October 2004
which the initial C share dividend is payable convert into
deferred shares

Despatch of cheques in respect of C shares purchased under the   29 October 2004
repurchase offer and the initial C share dividend as
appropriate



Notes:

(1)   If any of the above times or dates should change, the revised times and/or
dates will be notified to shareholders by an announcement on a Regulatory
Information Service.

(2)   All events in the above timetable following completion of the disposal of
Hodder Headline are conditional upon completion of the disposal. All events in
the above timetable following listing are conditional upon listing.


A copy of the circular will shortly be available for inspection at the UK
Listing Authority's Document Viewing Facility situated at the Financial Services
Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS, and at the
Company's website, www.whsmithplc.com (http://www.whsmithplc.com/grp/
media_1.htm)

                                     -Ends-

Enquiries:

WH Smith PLC
Mark Boyle Investor Relations 020 7514 9630
Louise Evans Media Relations 020 7514 9624

Greenhill Financial adviser to WHSmith 020 7440 0400
Brian Cassin
Peter Bell

Cazenove Broker to WHSmith 020 7588 2828
Edmund Byers

Hoare Govett Broker to WHSmith 020 7678 8000
Nigel Mills

Brunswick PR advisers to WHSmith 020 7404 5959
Louise Charlton
Tom Buchanan
Pam Small





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