Late Thursday afternoon Barnes & Noble announced that John Malone’s Liberty Media had offered to acquire the nation’s largest bookseller in a billion dollar deal. Liberty Media is offering $17 a share, which totals out at roughly $1.02 billion, and represents a substantial premium (around 20 %) over the $14.11 per share price that Barnes & Noble’s stock had at the close of business on May 19th.
Barnes & Noble put itself up for sale last summer in the midst of a bruising proxy and legal fight with investor Ron Burkle, who was trying to get the company to take steps to increase its value (see “Bookstores in Turmoil”). Barnes & Noble has fought the Burkle bid tooth and nail, and put itself up for sale last August indicating the company’s stock was “significantly undervalued.”
Liberty Media, which has stakes in cable, satellite television, and interactive companies, does not currently own any brick-and-mortar retail outlets. Barnes & Noble currently operates 705 retail stores and 623 college bookstores, but the company has also become heavily involved in digital publishing and distribution with the introduction of the Nook and the Nook Color e-readers.
According to the New York Times, Liberty’s bid is contingent on the participation of Barnes & Noble’s chairman Leonard Riggio, “both in terms of his continuing equity ownership and his continuing role in management.” This is a major difference between Liberty’s bid and Burkle’s takeover plans, which did not include a role for Riggio. Riggio has indicated that he is eager to stay on with the company. Thus Liberty’s bid would appear to be far more attractive to B&N management.