Retail restructuring group Hilco has emerged as the frontrunner to acquire stricken U.K. music and entertainment chain HMV, according to reports.
The Sunday Times reports that an industry consortium, including Universal Music, Warner Music and Sony, as well as film studios 20th Century Fox, Universal Studios and Warner Bros, favours Hilco as the preferred buyer for HMV, which entered administration Jan. 14, having long struggled to compete with consumers migrating to cheaper and more convenient digital and mail order services.
Hilco, which bought HMV Canada (then comprised of 121 stores) in 2011 for £2 million ($3.2 million), is understood to be one of approximately 50 interested parties bidding for HMV. Other companies said to be interested in acquiring the entertainment chain, which has 223 U.K. stores (including 9 Fopp outlets), are reported to include New York-based investment group Apollo Global Management, Oakley Capital and private equity groups Endless and Better Capital.
If Hilco is successful with its bid, its music and entertainment suppliers are believed to be willing to give HMV stores generous credit terms, reports the BBC. A spokesperson for Hilco had not responded to requests to comment at press time. Sony Music, Warner Music and Universal Music all declined to comment, although a well-placed industry source confirmed that Hilco and Apollo Global Management were among the interested bidders.
“All of the content providers are trying to be helpful in the situation,” an industry insider told Billboard.biz, adding, “No one wants to see HMV tank.” It is understood that the completion of HMV’s sale is dependent upon terms being agreed with the key suppliers to HMV.
Meanwhile, HMV’s administrators Deloitte have confirmed that they will accept gift vouchers in stores from Jan. 22. Deloitte and HMV had come under strong public criticism for its decision not to accept pre-paid gift vouchers in the immediate aftermath of the company entering administration, with British Conservative MP Sir Tony Baldry accusing HMV’s bosses of committing theft by allowing the sale of gift cards throughout the Christmas period. That decision has now been revoked, with Deloitte confirming today (Jan. 21) that it was able to honour the vouchers until further notice, having “urgently assessed” the companies’ financial position.
Deloitte also confirmed that the proceeds of charity releases, including the Hillsborough Justice Collective single “He Ain’t Heavy He’s My Brother,” which features guest vocals from Robbie Williams and Sir Paul McCartney and topped U.K. charts in December, would be paid in full.
“We will continue to assess the longer term options for the business whilst continuing to trade,” said Nick Edwards, joint administrator, in a statement. “I am hopeful this process will result in the business continuing as a going concern,” Edwards went on to say.