Barnes & Noble weighs sale after receiving interest from multiple parties
Shares of Barnes & Noble Inc (NYSE:BKS) are rocketing Thursday after the struggling bookseller revealed it is contemplating a sale after receiving interest from multiple parties, including from the company’s chairman Leonardo Riggio.
The US’s largest retail bookseller is now launching a formal review to analyze its strategic options and a special committee has been appointed by its board to spearhead the review.
In response to the news, investors sent Barnes & Noble shares up 19.8% to $5.46 before the opening bell on Thursday.
In a statement, Barnes & Noble also said it has moved to adopt a short-term shareholder rights plan – sometimes called a poison pill – which aims to defend the company from a hostile bid after seeing “rapid material accumulations” of its stock by parties it failed to identify.
Read: Barnes & Noble reports wider-than-expected loss and weaker revenue in fiscal 1Q
Barnes & Noble’s business has been under attack for years as customers have turned to Amazon.com Inc (NASDAQ:AMZN) and other online retailers for books. In another blow, the company’s Nook digital book reader has also been eclipsed by Amazon’s Kindle as well as other popular tablets.
About a month ago, an activist investor Richard Schottenfeld revealed a bigger stake of 6.9% in the bookseller and disclosed he had engaged in discussions with its chairman Riggio about a potential sale. Schottenfeld is betting that the bookseller could position itself for a sale by widening its reach beyond music, books and DVD sales to toys and games following the closing of Toys R Us.
Barnes & Noble’s board is being advised by Guggenheim Securities LLC as its financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP as its legal advisor.
Its special committee of independent directors is comprised of Mark Carleton, Paul Guenther, Patricia Higgins and Kimberley Van Der Zon.
Barnes & Noble operates 629 stores in fifty states as well as an e-commerce site BN.com.
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/206401/barnes-noble-weighs-sale-after-receiving-interest-from-multiple-parties-206401.html
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