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Customer Roger Oegema, left, is helped by HMV assistant manager, Jerry Medeiros in a Toronto HMV outlet.

Sarah Dea/Sarah Dea

Struggling British music and books retailer HMV Group is looking into the possible sale of its Waterstone's books chain and Canadian business as it seeks funds to secure its future.

The 90-year-old firm, which has issued two profit warnings this year and said earlier this month it would fail a test of its year-end debt rules, said there was no guarantee any deals would be done and it was not in talks to sell the whole group.

HMV shares earlier jumped over 20 per cent after Sky News said the group had been approached by suitors interested in making an offer for parts of its business.

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Sky News said potential bidders included retail restructuring specialist Hilco, which was focused on acquiring HMV's Canadian operations.

HMV declined to comment. Hilco was not immediately available.

Arden Partners' analyst Nick Bubb said investors should not expect any sale of HMV Canada to raise much money.

"Hilco ... will pay nothing for HMV Canada, which is now moving into loss. There is no alternative to having a big rights issue, so caveat emptor," he said.

Billionaire Russian businessman Alexander Mamut has been linked with a bid for Waterstone's, with the imminent initial public offering (IPO) of his mobile phone retail business Euroset set to bolster his war chest.

HMV said its lending banks remained supportive and it was in regular and constructive dialogue with them.

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