Tim Waterstone, the founder and one time owner of UK bookseller Waterstones, has announced a £280m (US$500m) offer to buy the company from music retailer HMV.
Private equity investors led by Waterstone said the indicative offer for HMV’s unit would see them pay a price equal to around 70p per HMV share for the bookseller Waterstone himself founded in 1982.
Shares in HMV rose sharply on the news, by 3.5% at 2.20pm in London to trade at 177.25p.
If successful, the buyers would abandon HMV’s proposed takeover of Waterstones rival Ottakars.
Waterstone has kept a keen eye on the business he sold to WH Smith in 1993. He served as HMV chairman from 1998 to 2001, when WH Smith sold the bookseller to HMV in a US$493m deal in 1998, having failed to buy back the business himself.
The latest offer would see private equity investors fronted by Waterstone effect a buyout of the unit through a new company chaired by Tim Waterstone and with former Penguin boss Anthony Forbes Watson as chief executive.
The consortium says bank finance has also been obtained “in principle”, though it revealed no funding details.
In February, there were reports that Waterstone was putting together a £250m deal to buy back the Waterstones chain.
In March, HMV successfully fought of a sweetened £842m takeover approach from private equity firm Permira, the same month that the UK Competition Commission cleared HMV’s expected acquisition of Ottakars.
In 2004 Tim Waterstone bought the Early Learning Centre chain of educational stores for £62m through Eagle Retail Investments, a takeover vehicle backed by publisher DC Thomson, Rhone Capital and Bank of Scotland Corporate Banking in a secondary buyout.
Early Learning Centre had originally been bought from John Menzies in a £30m management buyout backed by 3i.