Waterstone vows to fight on after rebuff by HMV

Tim Waterstone remained undeterred last night by an emphatic rebuff from HMV over his attempt to win back control of the chain of book shops he founded in the 1980s, saying: "We will come back and come back and come back again."

Mr Waterstone, who opened his first bookstore in 1982, confirmed he had made his latest offer to HMV before Christmas but that an approach to the company's independent directors had been "courteously" turned down. He said he had secured private equity backing for the bid, but refused to name his backers.

Earlier in the day HMV made it clear that it had no interest in selling the bookstore chain, saying it had a clear strategy for improving the performance of Waterstone's by employing proven management techniques from its HMV music stores.

"Recovery at Waterstone's is under way and there is considerable upside to be had. Our shareholders should be the ones to benefit from that upside rather than see it handed over to him," a spokeswoman for HMV said.

But Mr Waterstone insists that HMV is taking the bookstore business downmarket. Although the business had now stabilised, it had done so with earnings at a third of their level when HMV took control, he claimed.

"Waterstone's doesn't belong in the mid-market where HMV has taken it," he said. He wanted to return it to its original position as a literary bookseller, where it was better suited to compete.