Ref. 30023-19THE founder of book chain Waterstone's could help struggling WH Smith turn over a new leaf.

Entrepreneur Tim Waterstone mounted an unsuccessful bid to take over the Greenbridge-based firm in 1997.

Now speculation is growing that he will launch a fresh attempt.

Ironically, Mr Waterstone sold his bookstore chain to WH Smith in 1988.

If he is successful CDs and videos could be scrapped from store shelves across the country.

Speaking back in 1997 he spelled out his vision for the firm, which favoured books.

A deal is still far on the horizon however and many insist Mr Waterstone is not in a strong enough position to enter a bidding war after splashing out £62 million on the Swindon firm Early Learning Centre.

WH Smith declined to comment on the possible bid but it confirmed that another firm in the running, venture capital outfit Permira, is to examine its books later this week.

WH Smith spokeswoman Louise Evans, said: "Following poor Christmas trading figures we have taken action to take some costs out of the top office.

"That culminated in the announcement last week that there will be 270 job losses.

"Permira has been given permission by the board to go through the books and they will be doing that sometime this week.

"With regards to Waterstone's we have no comment to make."

In an interview with a Sunday newspaper, Kate Swann, who took on the role of chief executive earlier this year, said she is really confident that she can turn around the business.

She remarked: "There's a lot wrong operationally and that stuff is absolutely flexible it's a low-hanging fruit.

"I cannot put a time on it but we're already under way operationally and are making progress.

"People will start seeing things happening in time for Christmas."

Kevin Shoesmith