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Former owner bids for Waterstone’s

24/04/2006

The founder of the Waterstone’s bookstore chain is seeking to buy back the famous brand from retailer HMV, it has been revealed.

Entrepreneur Tim Waterstone, who founded Waterstone’s in 1982, said in a statement that an indicative offer of £280 million had been made to the HMV group, which purchased the chain in 1998.

The offer, equivalent to around 70 pence a share, was originally put forward in February and is dependent on HMV agreeing not to proceed with its planned purchase of rival bookstore Ottakar's.

In a statement, Mr Waterstone said that bank finance for the deal had been obtained "in principle".

He added that he was working on behalf of "private equity interests" and would form a new company alongside Anthony Forbes Watson, a former chief executive of the publishing group Penguin.

"This is a very fully priced offer for a business which faces major challenges to recapture the market share and operating margin that have been lost," said Mr Waterstone commenting on the bid.

"Much of the upside that we hope to create in Waterstone's would be passed to HMV shareholders under the terms of this offer. It would leave the remaining HMV retail business on an inappropriately low multiple which the stock-market should soon re-rate," he added.

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