HMV Group Plc, the music and DVD retailer that owns Waterstone’s bookstores, rose as much as 4.9 percent in London trading after Russian billionaire Alexander Mamut increased his stake to more than 3 percent.
Mamut’s purchase yesterday “highlights the huge valuation anomaly in the shares,” Nick Bubb, an analyst at Arden Partners Plc, said today in a note. “An investment of 5 million pounds is chicken-feed to Mamut at this stage, but his ultimate intentions are unclear.”
HMV rose 2.72 percent to 47.25 pence at the 4:30 p.m. close in London, giving it a market value of 200.1 million pounds ($322 million). The Maidenhead, England-based company’s stock had slumped 49 percent this year.
HMV is adding loyalty cards and diversifying into live music venues and festivals to boost sales as competition increases from supermarkets and online retailers.
Mamut’s experience in the technology market may lead him to think that HMV’s online investments are “under-recognized and underpin the value of the business at this ultra-low level,” Bubb said.
Mamut bought 000 Evroset, the Russian mobile-phone retailer that controls about a third of the country’s market, in 2008 and sold a 49.9 percent stake to OAO VimpelCom for $226 million. Mamut and other investors bought OAO Polymetal, Russia’s biggest silver producer, in 2008. His net worth was estimated at $1.5 billion by Forbes Magazine in February.