Ottakar's, the bookshop chain, recommended yesterday that its shareholders accept a £96.4m takeover bid from HMV, the owner of rival books chain Waterstone's.

Independent directors of Ottakar's said they had recommended a 440p-per-share offer from HMV, increasing its chances of winning a contest for the business.

Ottakar's added that it had withdrawn its recommendation of a 400p-per-share bid from a management buyout team led by its co-founders, James Heneage and Philip Dunne.

A combined Ottakar's and Waterstone's would own 325 shops in the UK.