HMV rescue deal by March end: report

Administrators at British entertainment retailer HMV are expected to go for a rescue deal as the entertainer's quarterly rent bill falls due at the end of this month, Reuters reported quoting a source.

HMV's administrators Deloitte has been trying to find a buyer for all or parts of the business in January, after it was hit by declining CD, DVD and video games markets amid intensifying competition from supermarkets and online rivals.

Deloitte has, since then announced 100 store closures and sold the 92-year-old  firm's Hong Kong and Singapore businesses putting over 1,700 of the group's 4,000-strong workforce at risk.

According to the source, a deal to save some or all of the remaining 116 stores would be struck before HMV's rent falls due later this month. The development would considerably lessen the pain of making the payment which could prove a big obstacle for HMV to overcome by itself.

According to Deloitte, it was in talks with a number of unnamed parties interested in HMV, with restructuring specialist Hilco, which bought HMV's debt in January (See: Restructuring firm Hilco UK buys HMV debt to gain control), and supermarket chain Asda (part of Wal-Mart Stores Inc) said to be among those considering bids.

According to a source not more than five parties were involved in the process, down from over 50 that had initially expressed interest.