Its 190p-a-share offer was only 3 per cent more than the company's market value and dismissed as too mean within hours by HMV's board last Thursday.
Permira insisted its offer was a fair one but it is considering its options and will take soundings from HMV's leading shareholders. The private-equity group said it was disappointed by the reaction of the company and the market to its offer, and stressed it may not choose to dig deeper.
Shares in HMV, which owns Waterstone's bookshops, edged only 1.75p better to 185.75p with experts saying they thought it unlikely Permira would return with a higher offer.
Permira has lined up Roger Parry, the chairman of the international division of the media group Clear Channel, to run HMV should it win control. The door may also be open for other private-equity bidders. Blackstone and Kohlberg Kravis Roberts are thought to have mulled an offer for the struggling retailer last year.
Tim Waterstone is believed to have won backing for a £250m move on the book chain he founded more than 20 years ago.
HMV has fallen vulnerable to a predator after dwindling sales and a dismal Christmas. Failure to combat competition from supermarkets and the internet more successfully cost HMV its first-half profits, much of its festive season profit margin, and prompted the resignation of its chief executive Alan Giles.
The group has responded to the greater competitive pressures in the book market by launching a takeover of Ottakar's, the independent book chain. The deal is agreed but has become mired in a competition inquiry likely to report its first findings by the end of next month.