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EMI buys W.H. Smith unit
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February 25, 1998: 7:20 a.m. ET
Waterstone to be folded into HMV unit with Dillons' book store chain
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NEW YORK (CNNfn) - EMI Group Plc will acquire Waterstone's book chain from retailer W.H. Smith for 300 million pounds ($495 million), the British music giant said.
The chain will be folded into a new joint venture that will include EMI's HMV Group, which consists of HMV music stores and Dillons' book store chains.
The new venture, which will be renamed HMV Media Group, will have 99 Waterstone stores and 78 Dillons' book stores in the U.K. as well as 271 HMV music stores worldwide.
In exchange, EMI will receive a minimum cash payment of 362.5 million pounds, 87.5 million of new equity, deferred consideration of 25 million and another 25 million payable on a floatation or sale of the venture.
To finance part of the cash of the payment, HMV Media has arranged a senior debt facility of 500 million pounds through an underwriting syndicate led by Merrill Lynch and SBC Warburg Dillon Read.
EMI also agreed to provide a 200 million pound bridge loan to help finance the new company.
For the six-month period ended Sept. 30, HMV Group reported sales rose 8.9 percent to 391.8 million pounds. Same-store sales grew 3.2 percent.
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EMI
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