[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 30 January 2006, 17:19 GMT
HMV shares surge on takeover move
HMV store

Shares in music retailer HMV have jumped by 17% after the group confirmed it had received a takeover approach.

HMV refused to reveal the name of the potential suitor, but media reports have said private equity group Permira is behind the offer.

According to the reports, Permira has hired Merrill Lynch to advise it on a possible 800m ($1.4bn) takeover.

The news saw HMV's shares recover from lows hit last week after the retailer reported a fall in sales and profits.

Shares in the group had been languishing at two-year lows after it posted a 2.7% drop in like-for-like sales during the key Christmas period, down from a 6.4% rise a year ago.

It also revealed pre-tax profits had fallen fell to 0.2m for the 26 weeks to 29 October, down from 10.5m last year.

Tough market

Analysts blamed online competition and aggressive supermarket pricing policies for HMV's festive troubles.

European-based Permira is no stranger to UK buyouts. In 2001 in bought DIY chain Homebase - which was later sold on to Argos-owner GUS - and in 2003 it snapped up the Travel Lodge hotel business and roadside restaurant chain Little Chef.

In a statement, HMV said it had "received a preliminary approach from a third party which may or may not lead to an offer being made".

The news saw its shares close 27.75 pence higher at 192p.



SEE ALSO:
Sales and profits tumble at HMV
12 Jan 06 |  Business
HMV bid for Ottakar's gets review
06 Dec 05 |  Business
HMV sees few signs of improvement
28 Sep 05 |  Business
Ottakar's backs HMV takeover bid
13 Sep 05 |  Business
Music download market to heat up
02 Sep 05 |  Business
HMV moves web business to island
02 Jul 05 |  Guernsey


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific