Page last updated at 14:57 GMT, Wednesday, 23 December 2009

HMV buys MAMA Group in live music takeover deal

HMV store front
HMV has gained market share as its rivals have gone into administration

Entertainment firm HMV is expanding its presence in the live music market by buying venue owner MAMA Group for £46m.

HMV's move comes nearly a year after it took a 9.9% stake in MAMA, which runs 11 concert venues including the Hammersmith Apollo.

MAMA also owns other interests, including an artist management business which represents bands such as Franz Ferdinand and the Kaiser Chiefs.

HMV chief executive Simon Fox said he was "delighted" at the deal.

Since January, HMV and MAMA have been partners in their Mean Fiddler joint venture, which runs venues in London, Birmingham, Edinburgh and Aberdeen.

"Our joint venture has worked well since its formation and the full combination of HMV and MAMA will enable us to accelerate our growth into live music," said Mr Fox.

Turnaround tactics

The deal marks the latest stage in a three-year "transformation plan" unveiled by Mr Fox in March 2007 in response to falling sales of CDs and the growth of illegal music downloads.

Other moves have included introducing the Pure HMV loyalty card scheme, taking a 50% stake in online music store 7digital and even opening a pilot HMV Curzon-branded three-screen digital cinema in Wimbledon.

The firm has also been helped by the collapse of rival music retailers Zavvi and Woolworths during the recession.

HMV's takeover offer for MAMA, which is still subject to approval from shareholders, comes after the group rejected earlier bids from Luxembourg-based investment firm SMS Finance.

SMS is currently the biggest shareholder in MAMA, with a 29.8% stake.

However, HMV says its approach has the support of investors owning nearly 34% of MAMA's shares, including MAMA's directors.

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