HMV, the UK and music entertainment retailer which was the subject of a recent failed bid by Permira, has announced that Lazard Private Equity has withdrawn its support for Tim Waterstone’s attempt to acquire its book retailing subsidiary, Waterstone’s.
Waterstone, who founded UK bookstore Waterstone’s in 1982, made an initial offer of 70 pence per share, valuing the business at approximately £280 million (€406 million; $514 million), at the end of April.
Lazard Private Equity declined to comment on the reasons for its withdrawal from the bid.
A statement from Waterstone and Forbes Watson this morning said the consortium had withdrawn its offer as the conditions imposed by HMV for the bid required that due diligence be competed in 14 working days; that the deal was not exclusive; and that HMV Group could terminate the process at any time and bar the consortium for a period of one year.
Waterstone said in the statement that the conditions were not acceptable to the consortium. “No potential acquirer could reasonably have accepted these conditions. However, we believe the financial logic for the group to sell the book business is demonstrably clear, and if these assets should be put on the market without penal preconditions to due diligence, then we should remain highly interested.”
According to a report in AFX News, Waterstone said HMV’s conditions for opening its books were “totally impossible” and that negotiations had been ongoing over the weekend.
However, a source close to the deal said that neither Waterstone nor Lazard made any attempt to discuss the deal over the weekend and that conditions for due diligence had already been agreed.
Having launched its first bookshop in Old Brompton Road in London in 1982, Waterstone’s was acquired by WH Smith in 1993, before coming under the ownership of HMV Group in 1998. Tim Waterstone left his position as chairman of the business in 2001, and is currently chairman of Chelsea Stores, which comprises the Daisy & Tom children stores and the Early Learning Centre Group.