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HMV close to deal on Waterstones sale
By CMU Editorial | Published on Tuesday 17 May 2011
HMV has reportedly received a £43 million cash offer for the Waterstone’s book chain from Russian billionaire Alexander Mamut who, as previously reported, is already a minority shareholder in the wider HMV Group.
The entertainment and retail firm put Waterstone’s up for sale earlier this year as it tries to restructure its debts following disappointing sales figures from its high street business. Mamut has been tipped as a buyer for HMV’s books chain for sometime, though there were rumours last week of disagreements between the Russian and HMV’s bankers on price. The £43 million offer, though, is somewhat higher than most expected. In a statement HMV confirmed it was now in “advanced discussions” regarding a sale of the Waterstones business.
Of course, the HMV Group could do with selling both Waterstones and its Canadian HMV chain as quickly as possible, to reduce their overall debts to more manageable levels, and to meet loan covenants, overdue tests for which will now be applied next month.
The banks reportedly remain supportive of HMV, and it is thought if both the Waterstones and Canadian sales can go through the immediate danger of collapse – or EMI-style repossession – will go away, though there are still many many challenges ahead.
According to Sky News, one recent presentation from HMV management admitted retail profits look likely to continue to slip in the next two years, to as low as £3 million in 2013, meaning even with debts restructured bosses at the entertainment group will have to quickly find new revenue streams to tap into.
