EMI to reduce its stake in HMV

EMI says it's going to sell part of its 42.7% stake in HMV Media Group after it floats in June.

But EMI says it will still remain a major shareholder in HMV.

Analysts expect HMV to raise up to £600 (€978m) through an initial public offering that will value it at about £1bn (€1.6bn).

It's not yet clear what stake Advent, the venture capitalist that owns 40.4% of HMV, will retain.

HMV says it will use the proceeds of the flotation to pay down net debt of £348m (€546m) and repay preference shareholders.

The share offer, which will include retail and institutional investors, comes on the back of strong third-quarter results.

They show a turnaround at Waterstone's bookshops and good CD and DVD sales.

HMV's first-half results, announced before Christmas, showed the group made a loss of £16m(€26m), compared with a loss of £34m (€55m) previously.