HMV moved within touching distance yesterday of taking over Mama Group for £46 million after a rival pulled out of a bid for the live music specialist.
SMS Finance, the investment vehicle run by the Italian telecoms billionaire Silvio Scaglia and Mama’s largest shareholder, made an unsolicited £38.3 million approach last month. The offer lapsed without support.
HMV is now likely to take over the company behind some of Britain’s best-known live venues, including the Hammersmith Apollo in London. The offer, made just before Christmas at 5.4p a share, has the backing of Mama’s board.
The high street music chain’s attempt to take over Mama began last January, when the two companies formed a joint venture to run eleven music venues including the Hammersmith Apollo, the Forum, the Garage and the Jazz Cafe.
A buyout will mean that Simon Fox, HMV’s chief executive, will gain control over all Mama’s interests, which include the Barfly nightclubs and the popular Lovebox music festivals. The company also runs an artist management business, which represents bands including the Kaiser Chiefs, Franz Ferdinand and White Lies.
HMV’s move into live music is a fightback first planned by Mr Fox three years ago, when the company was hit badly by music downloading and competition from supermarkets.
With the growing popularity of live music, HMV intends to open new venues, expand its ticketing business and promote gigs and festivals through its network of stores.
Mama reported pre-tax profits of £4.8 million in the year to July 31, up from £49,000 last year. HMV’s takeover offer for Mama, which is still subject to approval from shareholders, comes after the group secured the support of investors owning nearly 34 per cent of Mama’s shares, including Mama’s directors.
SMS owns 29.8 per cent of Mama, but failed to raise its offer after HMV agreed a higher price two weeks ago.