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HMV share price rises amid takeover talk

By | Published on Monday 7 February 2011


Shares in HMV jumped up 17% last week following those reports Russian businessman Alexander Mamut, who currently owns just over 6% of the entertainment and retail firm, had consulted bankers Credit Suisse about possible options for the future of the company.

The news has led to speculation that Mamut is planning a bid to buy the whole HMV Group, possibly with the main aim of gaining control of booksellers Waterstones. If that was his aim, presumably the other parts of the HMV business – the HMV stores, the live and management group MAMA, and any digital assets – would be sold off, most likely in separate parts.

According to the FT, insiders say Mamut is capable of mounting a bid to buy all the shares in HMV, which would cost him £96 million at the current share price. Though any acquisition could actually cost quite a bit more given rumours at least one private equity group may also bid. The most likely bidder from that domain is Permira, who previously made an offer for the retailer back in 2006, though the FT cites sources as saying rumour of formal contact between HMV and the equity outfit is just idle speculation.

Either way, all this chatter about possible bids resulted in an 8.8% in the firm’s recently flagging share price, so that it now stands at 24.75p