PERMIRA is plotting an £800m takeover bid for HMV, the troubled retail group that issued a profit warning this month.

The private-equity firm has appointed the investment bank Merrill Lynch to advise on a bid for HMV, which also owns the Waterstone’s book chain.

Permira has not yet made an approach to HMV or its advisers, although sources claimed that Permira had intended to approach the retailer as early as this week.

Revelation of Permira’s interest could scupper its plans. The private-equity group may also be forced by the Takeover Panel to make an announcement about its intentions this week.

Shares in HMV have fallen sharply in recent months, ending last week at 164½p, close to a two-year low. An £800m offer would put a value of about 200p a share on the business.

Investor confidence in HMV has been hit by a downturn in high-street spending and the referral of the group’s intended acquisition of rival Ottakar’s to the Competition Commission. HMV is also facing increasing competition from online music and book retailers such as Napster and Amazon.

Two weeks ago Alan Giles, HMV’s chief executive, announced that he planned to stand down at the end of the year. Giles is well regarded in the industry and his departure was a further blow to shareholders. The hunt for a successor is under way.

In recent months a number of American investors have built stakes in HMV, including Brandes, the value fund, which owns 7.3%, and State Street, which owns 5.15%.

It is not clear whether Permira would proceed with HMV’s planned acquisition of Ottakar’s.

Permira is already an investor in the high street, with a large stake in New Look, the fashion retailer. The private- equity firm has also made unsuccessful bids for Debenhams and WH Smith in recent years. A bid would be led by managing partner Damon Buffini and partner Martin Clarke.

HMV listed in London in 2002, but the brand dates back to 1921 when the first store was opened at 363 Oxford Street.

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