It is tempting to believe that breaking up a company is the way to restore its fortunes. It worked for ICI, says Robert Heller, but will it work for WH Smith?
Spectacular success in business normally results from outstanding feats. But not, one might think, if one is splitting up a company. A look at share valuations for the former ICI, for example, shows that a £9 billion company in mid-1993 is now worth £26 billion. On the face of it, it is the mere division that pays handsome dividends - bifurcation has accomplished far more for the shareholder than unity could ever have achieved. Small wonder, then, that disgruntled shareholders, such as those at WH Smith, reach for the break-up of their company as the answer to their prayers.