AEG Live is leading the race to acquire HMV's profitable live division, according to British newspaper the Daily Mail.
The Daily Mail reports that AEG Live has been granted preferred bidder status to purchase the HMV-owned Mama Group, which trades under the name HMV Live and comprises 13 U.K. venues, including London's HMV Hammersmith Apollo, HMV Forum, Jazz Café and the Garage venues, as well as the HMV Ritz in Manchester and HMV Institute in Birmingham. HMV's live arm also has stakes in several British festivals, including Global Gathering, High Voltage and London's Love Box.
Sony Music and private-equity firm Oakley Capital are among the companies also believed to be bidding for the business, which posted half-year operating profits of £3.4 million for the 26-week period ending October 29 2011, up from £1.5 million the previous year. According to HMV Group's pre-close update, dated May 4 2012, total year-end sales for HMV Live grew 5.4% in 2011/12, although the company did not disclose financial figures. Full year results are expected to be announced late June.
HMV first announced that it was looking to sell its live division in December 2011 to service its £168 million ($269.1 million) net debt. The sale is expected to net the embattled retailer between £60 million ($96.1 million) and £70 million ($112.1 million). When contacted by Billboard.biz, HMV declined to comment; AEG Live did not respond to requests to comment.
HMV Group completed its takeover of London-based MAMA Group in January 2010, having entered into a joint partnership with the company the previous year. In addition to its 13 U.K. venues and festival holdings, MAMA Group/HMV Live also encompasses an artist services division and several consumer operations, including U.K. music magazine The Fly and sponsorship business Music and Media Solutions.