THE founder and major shareholder of Ottakar’s yesterday surrendered to a cut-price £62.8 million takeover bid from HMV, admitting that it was the best offer that the book chain could attract.

James Heneage, the chief executive and 9 per cent stakeholder in Ottakar’s, said that the HMV offer of 285p per share “reflects the reality of the market in which we are.

“The offer from HMV, owner of the Waterstone’s book chain, is 35 per cent below the 440p offer that it tabled in September. That offer, which followed a bidding war with the management of Ottakar’s, led by Mr Heneage, lapsed after the Office of Fair Trading referred the deal to the Competition Commission following lobbying from publishers.

Since then, Ottakar’s has seen its sales slide as it has fought a weak book market and fierce price competition from supermarkets.

Shares in Ottakar’s held steady yesterday to close up ¾p at 287¾p as investors pinned their hopes on a rival bid from WH Smith or Borders.

Along with irrevocable commitments from Mr Heneage and his co-founder Philip Dunne in respect of their combined 15.2 per cent stake, HMV said that Morley Fund Management, the largest shareholder with a 16 per cent share, had also backed the offer. The fund manager, which also has an

8.7 per cent per cent stake in HMV, declined to comment.

Analysts said last night that the chances of another bidder joining the fray were fading.

Alan Giles, HMV’s chief executive, described the offer for Ottakar’s as “a very fair price”. He called it a “great deal” for HMV shareholders because there was a “very clear path to delivering synergies”.

Transferring Waterstone’s IT systems and buying terms is expected to generate £10 million of synergies. Mr Giles said that returns would exceed the cost of capital in the next financial year.

Shares in HMV closed up 1½p at 164¼p.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax