Permira abandons HMV bid |
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Published
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Tue, 21 Mar 2006 16:55
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LONDON: Private equity firm Permira Advisers Ltd. has given up its takeover bid for British music and books retailer HMV Group, after the latter turned down the 842-million-pound offer on 13 March. HMV had earlier rejected a lower bid from the firm at 762 million pounds.
Permira issued a statement saying it is disappointed at the response of the HMV board as it believed its revised 210 pence in cash per share offer "represented a compelling proposition for the shareholders of HMV".
Under the U.K. securities law, Permira is now barred from making a hostile offer for HMV for six months. It said it reserves the right to make another bid within six months if a third party enters the fray.
HMV became a takeover target as its sales slumped in the wake of severe pressure from online businesses like Amazon.com, digital download facilitators and supermarkets like Tesco. The company itself has been trying to consolidate by vying for bookstore Ottakar's to supplement its own Waterstone's bookstores. It has also been cutting its prices and making investments in its high street stores in an attempt to fight back.
The company said after rejecting the Permira bid that it will focus on revamping its store layouts, Internet site and integrating Ottakar's, if the buyout goes through.
Permira is now planning to raise 8.5 billion euros for takeovers and plans to surpass CVC Capital Partners Ltd, the fund said today in a statement. It had, along with four firms, bought Danish phone company TDC A/S in November last in Europe's biggest leveraged buyout.
HMV shares, which rose 17 per cent when news of the Permira bid emerged at the end of January, fell back to 183 pence giving the company a market value of 737 million pounds.
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Permira sweetens offer for HMV to 210 pence for a share 