HMV has confirmed that private equity house Permira Advisers Ltd has raised the price of its proposed takeover of the record shop and book selling chain (they own Waterstones too, of course).
As previously reported, Permira made an offer of 190 pence per share last month, but that was quickly turned down by the retail chain's senior management, who said the equity firm had undervalued their business. At the time insiders at Permira said they wouldn't increase their offer, though most investment types expected that actually they would.
And indeed they did. In a Regulatory News Statement, HMV yesterday confirmed the latest offer is 210 pence a share, itself a reported raise on a 208p offer made and rejected last week. The new offer would value the company at £845 million.
Permira is yet to comment on HMV's statement, so the specifics of any offer remain unknown. The equity firm is yet to get access to the music retailer's books (that's their accounts, not the Waterstones best sellers list), so the chances are they themselves are as yet unclear on some of those specifics.
As also previously reported, HMV has become a takeover target ever since it admitted increased competition from supermarkets and online retailers were affecting its revenues, especially in CD sales. If Permira were successful in their bid for the retailer it is likely they would try to increase profitability through streamlining, with a view to selling the company at a profit within five years.