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HMV makes move for Virgin

26.06.07

HMV, the music and books group, has held talks with Sir Richard Branson's Virgin Group about acquiring part of its Megastores chain, reports the FT. "The most recent contact came in the past fortnight but the two sides were so far apart on the valuation of Virgin Megastores and the structure of the deal that discussions did not advance."

HMV, which is due to report final results on Thursday, is only interested in parts of the Virgin portfolio, the newspaper says. Any deal for a significant part of the Virgin estate would also have to overcome formidable competition hurdles: HMV is the leading music retail specialist, while Virgin is second.

HMV, which also owns Waterstone's, is expected to announce profits of just £50m on sales of £1.9bn on Thursday. Its share price has fallen almost 30% over the last year. The music to books retailer is expected to confirm it is selling its Japanese division when it delivers its annual results this week.

FT

waterstone's Virgin Simon Fox HMV

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