26.04.11 | Bookseller Staff
Russian billionaire Alexander Mamut could reportedly buy Waterstone's for £35m. The oligarch could close a deal for the British high street retailer as soon as this week, the Sunday Times reports. There are also reports that parent company HMV Group may be considering a procedure known as company voluntary arrangement (CVA), a form of insolvency which could release HMV from onerous rent payments on its shops and provide a ring-fence around the company that would enable it to continue trading.Mamut owns a 6.1% stake in Waterstone's parent the HMV Group and has been linked to buying out the store in alliance with its former founder Tim Waterstone. When speculation about the chain's sale originally began, city analysts forecast the book chain to go for around £70m.
In a statement HMV denied it had initiated a CVA, although admitted it may be a possibility. It said: "As is entirely usual and appropriate in current circumstances, the group continues to keep itself fully informed on all of its available options and keeps its contingency plans up to date, among which a CVA may or may not be considered." The group added: "The company remains in constructive discussions with its banks who continue to be supportive, and current facilities remain fully available."
Along with issuing its third trade profit warning of the year recently, the HMV Group confirmed it would continue to weigh up strategic options for Waterstone's and its Canadian branches. HMV Group said it expected its end-of-year financial profits to be “around £30m"—less than half of last year's profit of £74.2m.
The HMV Group also revealed in that statement it had won a two- month reprieve on meeting its bank covenant tests from 30th April to 2nd July.