Ottakar's is in demand despite poor recent performance

Managing director James Heneage and chairman Philip Dunne have had their £78.6m offer - 350p a share - accepted by the firm's independent directors.

The move comes a day after music, DVD and book retailer HMV confirmed it was in talks to buy Ottakar's.

News of the MBO bid could spark a bidding war for Ottakar's. HMV already owns bookseller chain Waterstone's.

Some analysts believe HMV may now make a hostile 380p bid for Ottakar's.

Recent poor sales

Mr Heneage and Mr Dunne's Book Store Acquisitions bid vehicle is backed by private equity firm Phoenix Equity Partners.

HMV already owns popular book shop Waterstone's

Ottakar's first said last week that an MBO was a possibility.

Following the MBO's approval by the firm's independent directors, the wider shareholders will now have to chose whether to accept.

Ottakar's was founded in 1987 and today has 137 stores across the UK.

It has recently struggled against the growth in supermarkets selling books, and the success of online retailers.

Last month Ottakar's blamed supermarkets selling reduced price copies of the new Harry Potter book for a 6.7% drop in same-store sales in the four weeks to 16 July.

'Good price'

Despite the firm's current poor performance, it is obvious that Mr Heneage and Mr Dunne are confident about its future.

They believe that, with extra investment, the firm's performance can be turned around.

If HMV is eventually successful in buying Ottakar's, it is not known how many of the stores will become Waterstone's outlets, and how many HMV stores.

Senior independent Ottakar's director Christopher Thornton said the MBO represented a good deal for shareholders.