HMV agrees to buy Ottakar's for £62.8 million |
|
|
Published
:
Wed, 31 May 2006 13:25
|
LONDON - HMV Group PLC has reached an agreement to buy bookseller Ottakar's for £62.8 million The media group, which also owns Waterstone’s will pay 285 pence-a-share for Ottakar's which is less than yesterday's closing price of 287 pence.
Commenting on the deal, Ottakar's chairman Philip Dunne said the offer was fair and reasonable. "Over the past year the book market has undergone a significant change, with new levels of competition from the supermarkets and online retailers impacting all specialist booksellers and in particular those with insufficient scale to compete on equal terms," he added. Last September Ottakar's had given its nod for a 440 pence-per-share bid from HMV, but that offer had collapsed after a review by competition authorities.
The deal had valued Ottakar's at £96.4 million, but many authors and publishers had expressed monopoly concerns. However earlier this month, the Competition Commission had given the go-ahead for the deal. But during the intervening period Ottakar's experienced a sales slump and it was expected that if at all HMV came back with a new offer it would be substantially less than its initial one.
"The Ottakar's store portfolio is highly complementary to that of Waterstone's, and will benefit from the introduction of Waterstone's proven, sophisticated stock management systems," said HMV chief executive Alan Giles. "This will enable Ottakar's to offer an even wider and more relevant range of books." This deal will mean that 22 percent of the UK book market will be with HMV, while supermarkets will have 8 percent and online book sales 12 percent of the market.
HMV said that there would be some job losses, but declined to elaborate on their nature. HMV shares were trading 3-1/2 pence higher at 166-1/4 in early trading.
|
|
|
|
|
|
Print this Story
Waterstone withdraws from HMV bookshops bid 