Early Learning Centre owner Waterstone (pictured) is credited with changing the face of book retailing in the UK after he established the business that bears his name in the early 1980s. The Waterstone's chain, which launched a 440p bid for Ottakar's two weeks ago via parent HMV Group, still harbours a majority share of the UK book market.
However, Waterstone told Retail Week he was unlikely to succumb to overtures and join a bid. 'I just can't. I couldn't go up against Waterstone's. It made my life,' he said. He would not reveal which venture capitalist had approached him.
WHSmith is widely believed to have been in talks with the non-executive board of Ottakar's, but declined to comment on any bid.
WHSmith chief executive Kate Swann may acquire the chain and maintain the Ottakar's name and existing management.
However, sources said an overly extravagant bid from the cautious Swann, who is hard the books offer hard in existing stores, is unlikely because WHSmith's outlets overlapping in all but about 10 of Ottakar's markets.
Meanwhile, Waterstone's overlaps with Ottakar's in an estimated 31 locations. HMV said Ottakar's would present a fast track to expansion and increase market share from 15.7 per cent to 23.6 per cent. Sales at Waterstone's were£440 million last year, while sources said pure book sales at WHS were closer to£350 million.
Ottakar's founder and managing director James Heneage, who fired the opening salvo in the battle for the chain with his 400p-a-share bid, is thought to be 'fighting like an alley cat' to raise more cash. Sources believe Heneage could come back with an offer of up to 484p-a-share.
As Retail Week went to press, Ottakar's was poised to unveil interim results.
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