Waterstones bid referredWaterstone's bid hits stumbling block
07 December 2005
Book buyers have helped to put the brakes on a multi-million pound bid by Waterstone's to buy one of its main rivals.
Waterstone's had been hoping to tie up the GBP 96.4 million deal for Ottakar's in September this year. It would have given the combined chain 325 stores across the UK.
But the Office of Fair Trading (OFT) has referred the proposed merger to the Competition Commission following a deluge of complaints from consumers. An OFT investigation also found that customers could suffer if Waterstone's and Ottakar's were no longer rivals in the same town.
John Fingleton, Chief Executive of the OFT, said: 'Our economic analysis shows that Ottakar's competes harder on non-price factors when a Waterstone's is nearby.'
Surprised by hostility
The OFT now wants the Competition Commission to scrutinise these concerns more closely, with a final report on the proposed takeover expected by next May.
The Society of Authors, which has 7,500 members, welcomed the decision. General Secretary Mark Le Fanu said: 'I think Waterstone's was perhaps rather surprised by the extent of the concerns and hostility to the takeover by publishers, authors and other booksellers.'
But HMV, the company behind Waterstone's, said it wanted to talk to the Competition Commission to explain why a takeover was possible.
Chief Executive Alan Giles said: 'The OFT's statement is very disappointing as we believe our offer would have resulted in an enhanced proposition to customers and greater sales of books, with no substantial lessening in competition.'