AEG In For HMV Venues?

AEG, Time Out owner Peter Dubens and a gaggle of publishing companies are interested in acquiring HMV’s UK venue interests, according to the Daily Telegraph.

The beleaguered retail chain put its 13 concert venues and various festivals on the block Dec. 20, as it tried to cut debts that have swollen to about £180 million.

The proposed sale comes just six months after HMV chief exec Simon Fox said the profitable division, which it acquired for about £60 million ($94 million) when it bought Mama Group in January 2010, was a core part of long-term strategy.

But the music store chain/360-degree music company’s 2011 was a disaster. Christmas – usually its boom time – was even worse.

First-half losses were close to £36.4 million ($56.4 million).

The rent on nearly 250 of HMV’s high street shops fell due at the end of December and Fox has already expressed “significant doubt” about the company’s ability to “continue as a going concern.”

Fox will be eager to recoup at least the £60 million it paid for the venues and festivals including Lovebox, Global Gathering, High Voltage and The Great Escape. He’s already staved off lenders including Lloyds Bank and Royal Bank Of Scotland by selling the Waterstone’s book chain for £53 million.

AEG would likely get a clear run at the HMV buildings in regulatory terms, but it would almost certainly be an issue for other major venue operators such as Live Nation and Academy Music Group.

Most of the HMV venues, which include London’s Hammersmith Apollo, Kentish Town Forum and Jazz Café, were largely the ones previously owned by Vince Power’s Mean Fiddler Music Group.

Having acquired them when it teamed with Irish promoter Denis Desmond to acquire Power’s company, it was forced to shed them when the partnership bought 56 percent of AMG in 2007.

MAMA Group paid £6 million for them before selling out to HMV in 2009. The value of the business HMV’s trying to offload is enhanced by the fact it also includes the festivals and a management company that has Kaiser Chiefs and Franz Ferdinand on its books.

Dubens, the entrepreneur who set up Oakley Capital, usually favours electronic media companies such as 365 Media Group, which he subsequently sold to BSkyB, and Pipex, the Internet service provider.

However, HMV’s venue portfolio may sit comfortably alongside his recently acquired listings magazines. He has 50 percent of Time Out, the London publication, and 66 percent of Time Out New York.

U.S. banker Citigroup is handling the sale of HMV’s music businesses.

The interest it’s sparked appears to have impressed analysts more than it’s impressed HMV stockholders. Shares fell 0.13 pence to 3.35 pence, valuing the company at just £14.2 million.

Philip Dorgan at Panmure Gordon told the Telegraph that it’s pleasing that people are interested but that it will all come down to the price and whether it is enough to cut the debt.

“If HMV Live only fetches £50 million, it will still leave the business with £130 million of debt,” he said.