Hedge fund reportedly in talks about takeover of Waterstones

A hedge fund is reportedly in talks about a possible takeover of the bookseller Waterstones.

Wednesday, 31st January 2018, 4:34 pm
Updated Wednesday, 31st January 2018, 4:35 pm
Emma Dubruel, 22, of York, dresssed as Jane Austen, of Pride and Prejudice, in Waterstones, York . A hedge fund is reportedly in talks about a takeover of Waterstones. Picture James Hardisty

Sky News has reported that Elliott Advisors, which has backed a number of UK retail deals, is one of a small number of bidders to have lodged formal offers for the chain.

Elliott has been granted a short period of exclusivity within which to conclude negotiations about a deal, a source told Sky News. If the talks lead to a deal, it would see Waterstones changing ownership for the first time since 2011, when the Russian billionaire Alexander Mamut bought it from the ailing entertainment retailer HMV Group.

Sky News quoted an insider who suggested the price tag was likely to be much lower than the £250m that a newspaper report ‎said Mr Mamut was seeking last autumn.

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A spokesman for Elliott Advisors told The Yorkshire Post: “We don’t have any comment at this time.”

Seven years ago, Mr Mamut vowed to secure a “dynamic future” for Waterstones after he struck a £53m deal to buy the company from HMV.

At the time, Mr Mamut said he planned to reposition Waterstones as a regional and local community orientated bookseller.

In recent years, the firm has announced a number of innovations to boost sales. In 2012, Waterstones secured a partnership with the internet giant Amazon in a move that saw it offer Kindle e-reading devices through its shops.

Amazon’s ultra-low prices have long been blamed for the demise of high street booksellers but Waterstones said it hoped the digital agreement would “complement and strengthen” the traditional attributes of the shops.

The chain has undergone a major refurbishment programme which has led to the creation of dedicated digital areas, free wi-fi access and new coffee shops.

Waterstones has bookshops around Yorkshire, including outlets in Leeds, Wakefield, York, Harrogate and Sheffield.

Elliott Advisors took video gaming retailer Game Digital back on to the London stock exchange four years ago. Elliott had previously backed a rescue deal led by private equity firm OpCapita which transformed Game’s fortunes.