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Last Updated: Monday, 13 March 2006, 17:12 GMT
HMV rejects second bid approach
HMV store on Oxford Street

Music retailer HMV Group has rejected a revised 847m ($1.46bn) bid approach from private equity group Permira.

HMV, which owns the Waterstone's book chain as well as its music stores, received a second proposal of 210 pence a share last week.

Despite being 20p more than its previous bid, the Permira offer still undervalued the company, HMV said.

HMV has been struggling against falling sales and profits recently amid tough conditions on the High Street.

"The board unanimously believes that the revised proposal from Permira continues to undervalue the group," the company said.

Competition bites

Meanwhile, HMV is continuing to work on its strategy to revitalise the business while still seeking a successor to chief executive Alan Giles, it said.

It added that its proposed purchase of rival Ottakar's, currently under scrutiny by the Competition Commission, would be "value enhancing" to shareholders.

HMV suffered a 2.7% fall in like-for-like sales during the key Christmas period, while it made profits of just 0.2m in the 26 weeks to 29 October - down from 10.5m in the previous year.

The retailer blamed this on competition from supermarkets and the internet.

HMV shares fell 7p, or 3.59%, to close at 188.25p on the London market.

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