A sporting chance for Waterstone's

At last the welcome news that Waterstone's has been sold to Mr Mamut and is to be run by James Daunt of Daunt Books. According to Mr Daunt, Mr Mamut is a book lover. As to Mr Daunt's book selling credentials, just click here. Note the emphasis he puts on having good employees who know the business.

It is amazing how much a company is worth. Waterstone's was bought this week for £53 million.

The original Waterstone's was set up in 1982 by Tim Waterstone. He sold it to WH Smith in 1989 for around £50 million. WH Smith sold it to HMV in 1998 for £300million. From 2001 to 2005 Tim Waterstone attempted to buy Waterstone's back with bids ranging from £180 million to £280 million. He was unsuccessful.

In 2006 HMV/Waterstone's successfully took over Ottakers with a takeover bid reputed to be about £63 million.

Scroll forward to this week and Waterstone's is sold for £53 million. And some say that Mr Mamut paid over the odds.

Given that Waterstone's has obviously expanded with the extra Ottaker shops (and also Dillons in London), and it is practically the last bookshop chain standing in the high street, where did all its value go? Is value just confidence from the money market?

Still, it is great news for Waterstone's and the appointment of James Daunt gives it a sporting chance. Last month it was reported that Amazon profits tumbled 33%:

'Hugely successful internet company reports solid quarterly sales numbers, but because it is investing heavily in people and infrastructure, Wall Street slaps them down for missing Street earnings expectations.'

As soon as people and premises come into the equation, the internet model doesn't work so well. Let's hope it means that Amazon have to put their prices up and the future could look even more rosy for Waterstone's.