Friday, 20 May 2011

HMV to sell Waterstones for £53m

Earlier I spoke about an unconfirmed report that HMV is selling waterstones.

HMV has agreed to sell its Waterstone's book chain to a fund controlled by Russian billionaire Alexander Mamut for £53m. Mr Mamut already owns 6% of HMV, which has issued a string of profits warnings this year.

Last week HMV alerted the market to interest in Waterstone's from multiple bidders although it emerged that Mamut, who counts Chelsea FC owner Roman Abramovich among his friends, was considered to be the front runner.
HMV said it had little choice but to sell the book chain.

"It has become clear that the group needs to reduce its borrowing requirements in the short term in order to achieve a satisfactory refinancing," the company said in a statement.

"The board has concluded that the most timely and effective way to achieve this is through the disposal of Waterstone's."

Simon Fox, chief executive of HMV Group, said the sale to Mr Mamut "provides a good new home for the business".

The company said in a trading update that it expected profit before tax and exceptionals for the year to April 30 to be around £28.5m, and year end net debt to be £170m due to falling sales and tighter supplier credit.

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