Fitch Ratings, has cut to junk the debt of WH Smith, the UK retailer targeted for takeover. The move comes after the group Smith announced huge losses on Thursday and despite the sale of its Asia Pacific retail business.

The agency has warned of further cuts if the company is eventually sold to Permira, the private equity group which has already made a £937m (€1.4bn) indicative offer and is now going through Smith's books as part of due dilligence. Goldman Sachs advising Permira.