Hmv Group Regulatory News (HMV)

31 Jul 2007 07:00

HMV Group PLC31 July 2007 31 July 2007 Sale of HMV Japan HMV Group plc today announces that it has agreed to sell its HMV Japan business,which operates 62 stores and through the hmv.co.jp website, to DSM Investmentscatorce Co., Ltd for approximately £70.0m. Transaction highlights • Cash consideration, on a debt and cash-free basis of Yen 17 billion (approximately £70.0m), subject to post closing adjustments • Sale price represents a multiple of 9.0x historic EBITDA for HMV Group's financial year ended 28 April 2007 • Completion is expected to occur by the end of August 2007 Commenting on the sale, Simon Fox, Chief Executive of HMV Group plc, said: "Following recent consolidation in the market for entertainment retailing inJapan, and our review of the strategic options for HMV Japan, we have decidedthat this sale represents the best value for our shareholders. The sale of HMVJapan enables the Group to focus on the markets where it has market-leadingpositions. The proceeds will be used to pay down the Group's debt, which is animportant step towards meeting our medium term leverage targets." About HMV Japan The first HMV store was established in Japan in Shibuya, Tokyo in 1990. Today,HMV Japan consists of 62 stores, attracting over 40m visitors per annum, and isthe country's number three entertainment retailer in terms of market share. HMVJapan also operates a sector leading online business, which contributed 24% ofsales in 2006/07. For the year ended 28 April 2007, HMV Japan generated sales of Yen 47 billion,EBITDA of Yen 1.9 billion, operating profit of Yen 745 million and operated withgross assets of Yen 14.8 billion. Notes The consideration will be adjusted following closing, once a completionstatement has been drawn up, by means of a balancing payment on a Yen-for-Yenbasis which compares the closing net assets with the net assets at 28 April2007. The HMV Japan business comprises HMV Japan KK and HMV Retail Limited, togetherwith HMV's right to use the HMV name in Japan DSM Investments catorce Co., Ltd is a special purpose company of DaiwaSecurities SMBC Principal Investments Co. Ltd., which is 100% owned by DaiwaSecurities SMBC Co. Ltd., a joint venture established by Daiwa Securities GroupInc. and Sumitomo Mitsui Financial Group, Inc. Shinsei Bank Limited served as the financial advisor to HMV Group plc. Ends Enquiries: HMV Group Brunswick LLPNeil Bright, Group Finance Director Eilis MurphyPaul Barker, Head of Corporate Communications Alex Tweed01628 818 300 020 7404 5959 This information is provided by RNS The company news service from the London Stock Exchange