Rumours are spreading that Apollo Global Management is looking to take over HMV after it bought 10 per cent of the retailer’s debt last week.
Apollo, one of the world’s largest investment groups, bought the debt from Allied Irish Banks last week and there has been speculation that the group may seek to buy more in the coming weeks.
HMV, which has struggled to compete against online retailers and saw total sales fall 13.5 per cent in the six months to October, announced last Thursday that it is likely to breach its banking covenant in January.
If such a breach occurs, the retailer will be at the mercy of Apollo and its other lenders, the Telegraph reported yesterday.
This has fuelled speculation that Apollo is planning to buy more of HMV’s debt in order to gain control of the company, which is valued at £10 million on the stock market.
Commenting on HMV’s recent difficulties, CEO and Chairman of Powa Technologies Dan Wagner said: “Although HMV has introduced various promotions to drive sales, the shift in the way customers are buying goods has had far reaching implications.”
Blaming a fall in CD and DVD revenue and competition from iTunes and Amazon for HMV’s fall in sales, Mr Wagner added; “Although we’re in the festive season, many more retailers could succumb to a similar fate because of the accumulative effect of poor sales throughout the year.
“Retailers have to stay ahead of the game and have an effective online and offline strategy in place if they are to survive in this new technology-focused era.”
Apollo and HMV both declined to comment.