This formal clearing of the potential acquisition confirms the provisional findings of the Competition Commission published at the end of March. The Commission concluded that a merger of HMV-owned Waterstone's book chain with its smaller rival would not affect prices, range or service in the sector. It was thought the existence of supermarkets and internet retailers means that the merged company would have little ability to raise prices. Ottakar's said in a statement it welcomed the decision.
The Commission said: 'It would have every incentive to offer an extensive range of titles and high-quality service in its stores, because these features give the merging parties a competitive advantage over supermarkets and other non-specialist retailers.'
This Tuesday, in a trading update, HMV said it would wait till the final announcement from the Commission before decidingif itwould make a further bid for the book chain.
Seymour Pierce analyst Richard Ratner said: 'We believe HMV will renew its offer but not at 440p a share, which was originally offered - a price nearer 550p being more likely. We also believe that WH Smith could enter the fray, and there are rumours that one of the US players may appear.'
Ottakar's has about 130 stores, compared with Waterstone's 200. The majority of Ottakar's stores are in smaller towns and sources say only about 30 directly compete with Waterstone's outlets.
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