HMV Makes Mama Takeover Bid

British music and games retailer HMV Group is pushing further into the live business with a takeover bid for Mama Group valuing the company at £46 million.

Mama’s holdings include a chain of venues as well as an artist management company that represents the Kaiser Chiefs and Franz Ferdinand.

HMV, which already held a 9.9 percent stake in Mama, told the UK’s Press Association Dec. 23 that it already has the support of investors representing 34 percent of Mama’s shares. The deal is for 5.4p (8.6 cents) per share, which Mama says is a 23 percent premium on the Dec. 4 closing share price.

Mama’s directors “intend unanimously to recommend that Mama shareholders accept the offer as they have irrevocably undertaken to do in respect of their own beneficial shareholdings of Mama shares,” according to a statement cited by the Guardian. The deal reportedly has the support of Mama’s directors (8.9 percent stake) as well as that of Schroder Investment Management and Herald Investment Trust (15 percent).

The offer is higher than the recent £38 million, unsolicited takeover bid from Mama’s largest shareholder, SMS Finance, which holds a 29.8 percent stake.

Considering it a hostile bid, Mama turned down SMS’ bid, saying it undervalued the company.

HMV and Mama’s Mean Fiddler joint venture formed a year ago controls 11 venues, including the flagship 5,000-capacity Hammersmith Apollo as well London’s The Forum, Garage and Jazz Cafe.

HMV in recent years has moved to get a piece of the live music business as its retail business has been hampered by illegal file-sharing.

Mama also has holdings in the festival business, including a 60 percent stake in Lovebox festival in London as well as Brighton’s Great Escape.