Apollo Global not planning HMV takeover-source
LONDON Jan 14 (Reuters) - U.S. private equity firm Apollo Global Management LLC is not planning a takeover of HMV after buying some of the struggling British entertainment retailer's debt, a source familiar with the situation told Reuters.
HMV has struggled in declining music, DVD and games markets and in December warned that a poor start to vital Christmas trading meant a breach of its banking agreements was likely - a situation that would leave it at the hands of its lenders.
Media speculation that Apollo was preparing a takeover of the firm then arose after it bought 6 percent of HMV's debt last month, with some analysts expecting further deals to follow.
However, a source familiar with the situation told Reuters on Monday that this was not the case.
"It is not Apollo's intention to make any bid for the outstanding bank debt of the company," a source said, adding Apollo owned 6 percent of HMV's debt, rather than the 10 percent widely reported.
Apollo declined to comment.
HMV had said a late Christmas sales surge was critical to helping avoid a banking breach.
But it sparked worries last week that this had not materialised when it launched a month-long discounted sale on some products, sending its shares falling again.
The firm is expected to publish a Christmas trading statement in the coming weeks. HMV's underlying net debt stood at 176.1 million pounds ($284 million) at its half year to Oct. 27, up from 163.7 million a year earlier.
($1 = 0.6202 British pounds) (Reporting by Neil Maidment; Editing by David Cowell)
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