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MAMA Group sale enters second stage

By | Published on Wednesday 14 March 2012

MAMA Group

According to reports, HMV’s plan to sell its live music division, aka the MAMA Group, has now entered its second stage, after the passing of a 2 Mar deadline for first round bids.

As previously reported, last December HMV announced a ‘strategic review’ of its live business, which it acquired in 2010, and was reportedly actively accepting bids by early January. The flagging retailer needs the $65million+ cash boost a sale of MAMA will deliver, and could profit from the company based on what it paid two years ago, though losing its venue, festivals and management business does bring to an end the more interesting elements of HMV boss Simon Fox’s diversification plans.

Both existing music business players and private equity outfits were reportedly interested, and according to The Independent among the companies to actually submit first round bids were AEG Live, the Live Nation backed Academy Music Group and equity types and Time Out backers Oakley Capital. The Indy reckons AEG has been asked to submit a second refined bid, though it’s not clear on the status of Academy and Oakley’s proposals.

The jewel in the MAMA crown is the Hammersmith Apollo, which would be a perfect addition to AEG’s UK venue portfolio, especially in the burgeoning live comedy market, the West London Apollo venue being the stepping stone a-list stand ups take before reaching the ultimate goal of selling out AEG’s The O2 Arena on the east side of the capital.

Whether AEG would be interested in MAMA’s other businesses, in the festivals, artist management and marketing partnership domains, isn’t clear, and some reckon the company could be split up for sale, possibly with MAMA co-founder Dean James leading a consortium to buy those parts of the firm AEG doesn’t want.

Any bid by the Academy Music Group could be subject to competition regulator approval, given AMG already operates three major music venues in London in addition to the operations of its key shareholder Live Nation, which seems to be more closely aligning its own venues with those in the Academy network of late. Indeed MAMA acquired the Apollo in the first place when Live Nation was forced to sell it in order to get competition regulator approval for its purchase of a slice of AMG.

Elsewhere in HMV news, investors in the entertainment retail company are watching developments over at GAME with interest. As previously reported, GAME, the main high street video game seller in the UK, is on the brink, and seeking a buyer to avoid going into administration. While video game sales on the high street are in terminal decline, if GAME was to go under then HMV, which has seen its once buoyant gaming departments struggle in the last couple of years, could get a short-term boost, as it did after the demise of its main music and DVD selling rivals Virgin/Zavvi and Woolworths.

The latest news on the GAME front is that the OpCapita, the company which last year bought the nose-diving Comet chain, might take on the faltering games retailer also, possibly with a view to moving it more into the gadget space (which would make the GAME scenario a threat for HMV, which is also busy moving in that direction). US-based GameStop is also still being mooted as another possible bidder, as is retail restructuring outfit Hilco, though both of them might bid for the games seller’s non-UK operations.

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