HMV to make early market debut

HMV wants to sell shares to raise money to open more music and video stores

LONDON, England -- HMV Group, the UK's biggest music, video and book retailer, will make an earlier than expected debut on the London Stock Exchange and sell its shares at a lower price than analysts had forecasted.

HMV said on Wednesday it would begin trading on May 15 and expects its initial public offering price to be in a range of 190 to 220 pence a share, which would give the group a market value of £773-895 million ($1.12-1.29 billion).

HMV had earlier stated it planned to list its shares by the end of June, with many analysts predicting the group's market value would be about £1 billion.

"The market cap is less than expected and they seem to be in a bit of a rush," Nick Bubb, a retail analyst at SG Securities, told Reuters.

The company -- named after its trademark image of Nipper the dog listening to His Master's Voice of a gramophone -- is 43 percent owned by music giant EMI Group, while U.S. venture capitalist group Advent has a 40 percent stake in HMV and management the remainder.

HMV's trademark image: Nipper the dog listening to His Master's Voice

About 70 percent of HMV's shares will be offered to the public, with the rest to be divided equally between EMI and Advent.

HMV operates 325 music and video outlets worldwide, as well as 197 Waterstone's bookstores in the UK and Ireland.

Total sales rose 12.5 percent to £1.54 billion last year, while earnings before interest, taxes, depreciation and amortisation increased 7 percent to £119.3 million.

The company plans to use the money raised from the flotation to pay down its debt -- estimated at £450 million -- and increase the number of HMV outlets and revamp its Waterstone's stores over the next five years.

"We view the prospects of HMV Group with confidence and believe that our exisitng business and future plans position us well to strengthen the group's market position, exploit new opportunities and embrace new distribution channels," said HMV Chief Executive Alan Giles.