Saturday, May 14, 2011

PublishersLunch

Waterstone's Sale Nears, In Messy Process

HMV is making the same mess out of a Waterstone's sale that they have made out of the booksellers' neverending "turnaround." The fundamental problem is threefold: They spent a while pretending the bookseller wasn't for sale when it obviously was; they are selling at the worst time ever to sell an English-language book chain; and they have had unrealistic price expectations for the current market. Making it worse, HMV needs to raise enough cash to satisfy their lenders since they are in violation of their banking convenants, but the Waterstone's proceeds will not be sufficient by themselves.

The latest update is that Russian billionaire Alexander Mamut is reported by the FT to have raised his offer to £43 million in cash, which is roughly 8.6 times Waterstone's expected anemic pre-tax profit contribution of £5 million. (If true, that would be an improvement over last year's operating profit of £2.8 million. Full fiscal-year sales are likely to drop below £500 million.) HMV wanted £70 to £75 million, which is clearly not happening--but that's the amount the banks need from HMV to reduce their debt, or else the whole company could go into receivership. So a distress sale doesn't necessarily sold HMV's liquidity problems. The financial troubles have left the entire parent company with a market capitalization of about £48 million.

The UK press has floated rumors that as many as 10 companies may have also bid for Waterstone's, though a number of them are restructuring specialists or liquidators. Today is the deadline for preliminary bids. In the meantime, HMV group marketing director Graham Sim is leaving to join Penguin UK as creative director of their children's division.

On the Way: Trump and Townshend

Though not yet confirmed, RealClearPolitics claims that Donald Trump is working on a "policy book" in connection with his potential presidential ambitions that Regnery has "tentatively" set for late-summer publication. They say that Regnery's Harry Crawford will edit the manuscript, "which will be heavily ghostwritten, with Trump playing a supporting role in generating content."

More certain is that guitarist for The Who Pete Townshend is working on a memoir, currently titled PETE TOWNSHEND: WHO HE?, that agent Ed Victor is currently auctioning. Townshend has met with the finalists and the auction is expected to conclude next week. Waterstone's spokesman Jon Howells helps drive the bidding by telling the Bookseller, "This will be a massive book if published."

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