HMV has decided to sell off Waterstone’s in an effort to recover some money and reduce ongoing losses.
We reported in 2009 how HMV was struggling in the new online market as their high street stores had hardly innovated to tackle the new competition. This news follows that of the Barnes and Noble takeover offer which sees a huge media company swallowing up an old high street chain.
Waterstone’s Sold To Russia’s Alexander Mamut
The buyer has been named as Alexander Mamut the Russian billionaire. He is expected to pay £53 million for the 296 shops in which Waterstones owns.
Mamut already owns 6.7% of HMV and also owns Russia’s largest mobile phone company, Euroset.
Euroset floated in April and raised $1.5 billion for Alexander Mamut – he certainly can afford the modest price tag of £53m. This is will help pay off some of HMV’s £170 million debt. But what will he do with the shops?
Shareholders will have to approve the deal so if you own shares in HMV then expect to have to agree to tender some as part of the demerger and sale. More details to follow.
HMV Sales Continue To Fall
HMV high street sales have continued to fall with a reduction of 15.1% on figures from 1 year ago. Waterstones sales have fallen by around 8.4% due to the ever increasing demand for eBooks.
HMV has been moving away from CD and DVD sales over the last year to offer various technological products, live music and event tickets. However, there is stiff competition in all these areas.
HMV share price is down 84% in the last year, but have risen today.
Latest price is 11.48p, now up 15.28% (12.24pm, 20/05/11).
Check out the Google Finance page for the latest share prices: http://www.google.co.uk/finance?client=ob&q=LON:HMV