Britain’s competition regulator has given a provisional green light to a potential bid by HMV Group for U.K. bookseller Ottakar’s.
The Competition Commission said in a statement on Thursday (March 30) that it did not believe the U.K. market-leading music and entertainment retailer’s proposed bid for Ottakar’s would lead to a substantial lessening of competition in the domestic retail market for books.
HMV owns the rival Waterstone’s bookstore chain. It launched a cash takeover bid for Ottakar’s in September 2005 in a deal valuing the U.K. 130-store bookseller at roughly £96.4 million ($167 million). That bid subsequently lapsed.
In the CC statement, inquiry group chair Diana Guy said, “Throughout the country there is growing competition from supermarkets and Internet retailers in terms of both price and range, so the merged company would have little ability to raise prices either on best-sellers or other titles.”
In a separate March 30 statement issued to the London Stock Exchange, HMV said it “is now considering the full text of the Competition Commission’s provisional conclusions and will continue to work closely with the Commission.”
British corporate watchdog the Office of Fair Trading referred to the Commission in December 2005 following what it described as an “unusually high level of consumer complaints” on HMV’s proposal.
The CC’s final report is due by May 22.