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article imageElliott Management announces plans to acquire Barnes & Noble

By Karen Graham     Jun 7, 2019 in Business
Activist firm Elliott Management announced Friday it plans to acquire bookseller Barnes & Noble for roughly $683 million, including debt. After the announcement, the stock was up 10 percent to $6.56 per share, in premarket trading.
After struggling for the past decade to keep pace with, Barnes & Noble, the nation's premier bookseller has decided it has fought the good fight long enough, agreeing to be bought out by private equity firm Elliott Management for $683 million.
The purchase by the hedge fund, that also bought Britain’s biggest bookseller, Waterstones, last year - comes after Barnes & Noble announced in October last year that it might put itself up for sale after it was approached by a number of potential buyers - including the founder Leonard Riggio who opened Barnes & Noble stores across the country in 1965, turning the name into a superstore.
The deal values Barnes & Noble at $6.50 a share, a 43 percent premium to the retailer’s 10-day volume weighted average closing share price before news of an imminent deal leaked Thursday. After the news broke, Barnes & Noble stock jumped to $6.53 a share in premarket trading, reports CNBC.
Over the past five years, Barnes & Noble has lost more than $1 billion in market value. holds nearly half of all book sales, while Walmart has about 4.2 percent of the market. The one good thing for the bookstore is that as a private company, it will no longer have to worry about quarterly sales reports and continued unfavorable comparisons to Amazon from Wall Street.
"We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years, said Barnes & Noble founder and CEO Leonard Riggio in a statement. "In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead."
The deal is expected to close later this year and will be structured as a merger. Barnes & Noble also will pay out a quarterly cash dividend of 15 cents per share, payable on Aug. 2. Barnes & Noble stock was at $6.70 a share as of 12:57 a.m. EDT on June 7, 2019.
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