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HMV to sell Waterstone's book chain for £53m | |
(40 minutes later) | |
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. | |
The sale to A&NN Capital Fund Management still needs shareholder approval, but HMV said the deal should be finalised by the end of June. | |
Mr Mamut has been linked with a deal to buy Waterstone's for a number of weeks. | Mr Mamut has been linked with a deal to buy Waterstone's for a number of weeks. |
HMV announced in March that it was exploring options to sell the business. | |
The troubled retailer has been struggling to cope with declining sales in the face of increasingly fierce competition from supermarkets and online retailers such as Amazon and iTunes. | |
It announced on Friday that like-for-like sales, which strip out the impact of sales from stores open less than a year, for the 12 months to the end of April slumped by 13.7%. Like-for-like sales at Waterstone's fell by 3.8% over the same period. | |
It has estimated debts of £130m and is under pressure from its bankers to raise cash. Only last month it said it expected annual profits to be about 25% lower than it had hoped. | |
'New home' | |
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". | |
Mr Mamut said he was "extremely pleased to have reached an agreement to acquire Waterstone's and its great heritage". | |
"I believe our investment and strategy will secure a dynamic future for the UK's largest bookshop chain." | |
In the UK and Ireland, the group owns about 285 HMV stores, but is in process of closing 60 of these as part of its cost-cutting plans. | |
It owns 296 Waterstone's bookstores, employing about 4,500 people. | |
The group's international business comprises 125 stores in Canada, five in Hong Kong and two in Singapore. |