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HMV’s rival bidder for MAMA steps down

By | Published on Tuesday 5 January 2010

HMV’s acquisition of live music and artist management group MAMA is looking all the more assured now that Luxembourg-based SMS Finance has confirmed its offer has lapsed.

As previously reported, SMS made a bid for MAMA early last month, but management at the London-based company refused to back it, calling the offer “highly opportunistic”. At more or less the same time rumours started to circulate that HMV, who co-own the Mean Fiddler venue network with MAMA, would make a rival bid, with insiders saying that if a takeover was now inevitable MAMA directors would prefer their Mean Fiddler business partners to be their new owners.

Then, just before Christmas, HMV confirmed it would make an offer to MAMA’s shareholders. And MAMA’s board quickly gave the retailer’s grand plan its backing, with directors pledging to sell their shares to the diversifying retail firm.

SMS’s offer, however, remained on the table for shareholders, and indeed the investment outlet increased the price it said it would be willing to pay. They already own 29.8% of MAMA, while HMV have just under 10% with MAMA directors holding just under 9%.

But having failed to win board support for their offer, and with few of the company’s other shareholders seemingly keen on the SMS bid, the investment company has confirmed that their offer has now lapsed. Which clears the way for HMV to proceed with their board-backed acquisition.

How eager SMS will be to sell their third of MAMA now remains to be seen.