British publishers have reacted angrily to the proposed takeover of the Ottakar's book chain by HMV, parent company of Waterstones book sellers.
After taking the views from its members, the U.K.'s Publisher's Association sent a stern letter to the Office of Fair Trading late last week, firmly opposing the HMV purchase. If the acquisition is permitted, it will effectively end competition in the High Street bookstore market, since the remaining chains will be substantially smaller than either Ottaker's or Waterstones, the PA argued. A combined Waterstones and Ottakar's will control 300 shops and about 24% of the U.K. book market.
HMV's £96 million takeover bid competed with a management buyout led by the current managing director and Ottakar's founder, James Heneage. Heneage, backed by Phoenix Equity, offered £91 million, only to be trumped at the last minute by HMV. Institutional shareholders accepted HMV's bid, but Heneage has 21 days to top it.
The Office of Fair Trading has been bombarded by publishers' and authors' complaints, expressing fear that Waterstones' dominance of the U.K. book trade will lead to an impoverishment of the U.K. literary community, a reduction in choice for readers and a stifling of new talent. Time Warner complained about "the further homogenisation of the high street"; Andrew Franklin at Profile warned that "anything which tends towards a monopoly is bad."
With rumors circulating that Bertelsmann may get involved in an acquisition and that at least one other trade bidder, possibly WH Smith, is still in the running, the story is far from over. British publishers are hoping that Heneage and his bibliophile team can still pull the cat out of the bag.
