First Encounter With The Pawn Broker

Admit it, you're addicted to Pawn Stars and Hard Core Pawn and those Pawn Queens from suburban Chicago. You've watched those programs often enough to have a rough idea of what it would be like to engage in a transaction with a pawn broker.

Apparently, the bankers who control HMV are unfamiliar with the genre.

HMV is bankrupt and the banks holding the loans would like to see capital raised to meet debt obligations. Once those debts are brought under control, HMV would like to rise from the ashes like a phoenix, restructured but functioning. To reach that point, HMV would part with its Waterstone's book chain, but the banks insist on a price of L70 million.

Russian billionaire Alexander Mamut says nyet. He owns 6% of HMV already, and would like to acquire Waterstone's for L35 million.

And like the pawnbroker, he's in the position of power. HMV is rather desperate for cash, and no one else has come forward to buy their valuables. The pawnbroker has to make his profit, and if HMV is worth L70 million, he'd be a poor businessman to pay full retail.

So it's take it or leave it, Lloyds and Royal Bank of Scotland. Accept the low-ball offer because it's the best you'll get in any pawn shop in town.

They're balking now, of course. The fact remains, if they don't agree a deal, they're left with the option of closing stores to reduce costs, but that could put a fork in the whole phoenix scenario, and the banks would end up with less than Mr. Mamut's current offer.

Someone should point them in the direction of any pawn shop television program and give the bankers an education in financing that doesn't take place in sumptuous offices. Where the seller doesn't have any other option, and the pawn broker knows it.