Takeover talk boosts HMV shares
Music and books retailer HMV sparked a scramble for its shares today by revealing that it had received a takeover approach.
More than £100m (€146m) was added to the value of HMV, which owns the Waterstone’s book chain, after it said a third party was interested in mounting a takeover bid.
Reports suggested private equity firm Permira was behind the approach and had hired banking heavyweight Merrill Lynch to advise it on a possible £800m (€1.2bn) offer.
Justin Scarborough, of Panmure Gordon stockbrokers, said the approach was not a surprise because investors had been rattled by a post-Christmas profits warning from HMV and the uncertainty over the impact of digital downloads.
He said: “We do believe that HMV has a viable future, that it remains capable of generating high levels of cash and we have suggested in the past that it would be a matter of when – not if – HMV is approached.”
