13th Mar 2006 07:02
HMV Group PLC13 March 2006 13 March 2006 For immediate release HMV Group plc ("HMV Group" or the "Group") Statement re offer proposal On 9 March 2006, the Board of HMV Group announced that it had received a revisedconditional proposal regarding a possible offer for the Group at 210 pence perordinary share in cash from Permira Advisers Limited ("Permira"). Today, theBoard of HMV Group is providing an update on its operational strategy and searchfor a successor to Chief Executive Alan Giles as well as its response to therevised conditional proposal made by Permira. Since the announcement of Christmas trading on 12 January 2006, HMV Group hascontinued to work on its strategy for revitalising the business. In the UK, the Group has focused on formulating a revised value proposition toenable the Company to capitalise on the strengths of the HMV Brand, the rangeauthority in store and excellent and knowledgeable staff. These are the Group'sunique selling points and it is the Board's belief, backed by detailed consumerresearch, that by focusing on them in combination with a revised price andpromotional architecture, HMV Group will be able to compete effectively againstthe supermarkets and other competition, including the internet. On 6 March, the Group commenced a controlled five store trial of a newproposition, featuring merchandising and layout changes and a new pricearchitecture for chart and back catalogue music and DVD which includes chart CDsat £9.95, chart DVDs at £14.95 and three back catalogue price points for each ofCDs and DVDs. The development of hmv.co.uk is continuing apace, following its successfulre-site to Guernsey in November 2005, with a redesigned website, whichre-launched on 9 March. Plans are also well advanced for integrated marketingand in-store promotion with a home delivery trial scheduled for April. A reviewof Waterstone's Internet strategy is also underway. Waterstone's continues to benefit from the application of the 'HMV blueprint'with the focus being on its value positioning, format and range authority. HMVGroup continues to believe that the acquisition of Ottakar's, if cleared by theCompetition Commission, and subject to any new offer, will be a value enhancingopportunity for its shareholders. Provisional findings from the CompetitionCommission are expected by the end of March. As part of its commitment to creating shareholder value, the Board of HMV Grouprecognises that there is potential to operate the Group with a higher level offinancial leverage and will review the Group's capital structure once theOttakar's situation has been clarified. The Board of HMV Group is making good progress on the recruitment of a successorto Chief Executive Alan Giles, and is now in a position to advance this process.A further announcement will be made in due course. In the light of these plans and the Board's view of the medium and long termprospects of the business, the Board unanimously believes that the revisedproposal from Permira continues to undervalue the Group. As such, HMV Group willnot be entering into discussions with Permira with regard to the revisedconditional proposal. This announcement has not been made with the approval of Permira. PRESS ENQUIRIES HMV 01628 818 300Paul Barker Citigroup 020 7986 4000Ian HartAndrew Seaton UBS 020 7567 8000Aidan CleggClive Beattie Brunswick 020 7404 5959Susan GilchristWilliam Cullum Citigroup Global Markets Limited ('Citigroup') is acting for HMV Group andno-one else in relation to the approach referred to in this announcement andwill not be responsible to anyone other than HMV Group for providing theprotections afforded to customers of Citigroup or for giving advice in relationto this approach. UBS Limited ('UBS'), which is regulated in the United Kingdom by the FinancialServices Authority, is acting for HMV Group in connection with the approachreferred to in this announcement and no-one else and will not be responsible toanyone other than HMV Group for providing the protections offered to clients ofUBS Limited nor for providing advice in relation to this approach. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the"Code"), if any person is, or becomes, "interested" (directly or indirectly) in1% or more of any class of "relevant securities" of HMV Group, all "dealings" inany "relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 pm (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill continue until the date on which the offer becomes, or is declared,unconditional as to acceptances, lapses or is otherwise withdrawn or on whichthe "offer period" otherwise ends. If two or more persons act together pursuantto an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of HMV Group, they will be deemed to be asingle person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of HMV Group by HMV Group or Permira or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Takeover Panel's website atwww.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8, you should consult the Panel." This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Hmv Group