Retailer's board: Offer 'undervalued' group.

London-based HMV Group has turned down a takeover bid from private equity firm Permira Advisers Limited.

In a brief statement issued to the London Stock Exchange shortly after trading closed today (Feb. 7) at 5pm GMT, the retail giant said: "Further to its January 30 2006 announcement concerning a preliminary approach, HMV Group confirms it has received a conditional proposal regarding a possible offer for the group at 190 pence per ordinary share from Permira Advisers Limited."

The statement added that the HMV Group board and its advisers had reviewed the proposal, but had "concluded that the proposal undervalues HMV Group."

HMV Group "will not be entering into any discussions with Permira Advisers Limited with regard to the proposal," the statement concluded.

On Jan. 30, HMV confirmed to the LSE that it had received a preliminary approach regarding a takeover. It did not reveal the identity of the buyer at that time.

Subsequent press reports suggested Permira was tabling an £800 million ($1.38 billion) bid, although the company declined to comment on the reports. Permira has offices in the United Kingdom, continental Europe, Japan and the United States.

The bid speculation saw HMV Group shares rise £1.92 ($3.35) Jan. 30, up from an opening £1.645 ($2.87). Today, shares closed at £1.84 ($3.21), down 2% from an opening £1.875 ($3.27).

In its half-year figures to Oct. 29, 2005 (published Jan. 12), HMV Group reported sales down 0.1% to £759.7 million ($1.34 billion), with operating profit down 85% to £2.8 million ($4.95 million).