Speculation billionaire Alexander Mamut has stepped in with a £43m bid to clinch control of the Waterstone's outlets
Tim Waterstone, the founder of the book stores that take his name, is poised for a dramatic come-back after his new, rich Russian commercial partner submitted a £43m bid for the business.
Shares in the bookseller's owner, HMV, climbed 12.5% amid speculation that billionaire Alexander Mamut had put in a new offer in an attempt to clinch control of the 314 Waterstone's outlets in Britain and Ireland.
HMV has confirmed it was "in advanced discussions regarding a potential sale of Waterstone's", though it declined to confirm the name of the potential purchaser and stressed there was no certainty a deal would be concluded.
The founder – now in his 70s – has made five previous attempts to purchase back Waterstone's, the hard-pressed business he founded with a £6,000 redundancy cheque from WH Smith in 1982.
Waterstone and Mamut have been negotiating with HMV for months and a deal at the proposed level would be a big climbdown by the parent company, which was originally hoping for £75m.
But the value of the business has been under pressure amid cut-price competition from internet-based retailers such as Amazon. HMV has issued a series of profit warnings this year and its share price plunged after it revealed it was in danger of breaching its banking covenants.
Waterstone's had a turnover of more than £500m last year but made only £2.8m in profits. The HMV music chain has even bigger problems and the parent group wants to dispose of Waterstone's to help cut its £130m of debts.
Mamut owns Russian mobile phone retailer Euroset and a clutch of other businesses, and would join a rapidly lengthening list of men from Moscow who have bought into Britain. They include Alexander Lebedev, owner of the London Evening Standard and Independent newspapers, and Roman Abramovich who controls Chelsea and the state-owned Rosneft oil group, which recently tied up a deal to buy a stake in BP.
Mamut already holds a 6.1% stake in HMV. The entrepreneur had entered exclusive talks with HMV linked to an expected offer by the end of March but negotiations broke down, allegedly because Mamut was not prepared to pay more than £35m.
A deal with Tim Waterstone and the Russians could find favour with Antony Beevor, the author of Stalingrad. He told the Guardian in March that he would like to see the founder return.