Barnes and Noble is trading a point and a half above Malone's offer:
Liberty Media Offers to Buy Barnes & Noble
By JULIE BOSMAN
New York Times
DealBook
May 19, 2011, 8:09 pm
Barnes & Noble, the nation’s largest book chain, said on Thursday it had received a proposal from Liberty Media to acquire the company, more than nine months after the bookseller put itself up for sale.
Liberty Media offered to pay $17 a share in cash, valuing the company at $1.02 billion. The offer represents a 20 percent premium to Barnes & Noble’s closing stock price on Thursday. The stock last traded above $17 in February.
The offer caused the stock to jump in after-hours trading well above the offer price.
The proposal is contingent on the participation of Leonard Riggio, the chairman of Barnes & Noble, “both in terms of his continuing equity ownership and his continuing role in management,” according to a statement from Barnes & Noble.
The offer came from an unexpected source. Liberty Media, a media conglomerate run by John C. Malone, has historically bought stakes in cable, satellite television and interactive companies, but not in bricks-and-mortar retail — one reason the continued participation of Mr. Riggio, a respected industry veteran for decades, could be a condition of the deal.
Barnes & Noble announced in August that its board was putting the company up for sale, saying that its stock was “significantly undervalued.” It formed a special committee to review its options and enlisted Lazard as its financial adviser and Morris, Nichols, Arsht & Tunnell as its legal adviser.
Mr. Riggio said after the announcement in August that he was “willing and eager” to stay with the company in the years ahead.
Barnes & Noble said on Thursday that the special committee had not yet evaluated the proposal from Liberty Media, and warned shareholders that there was “no assurance” that a definitive offer to buy the company would be made.
Brick-and-mortar book retailers have been under pressure lately as the business has accelerated its shift from print to electronic. After years of declining sales and store traffic, Borders shook the publishing industry when it filed for Chapter 11 protection in February, promising to revamp the company’s strategy for the digital age. It has closed hundreds of stores since then.
Barnes & Noble, which operates 705 retail stores and 623 college bookstores, has turned much of its attention to digital books — another factor that could interest Liberty, which has been involved in electronic commerce with investments in Expedia and drugstore.com, among others. Since 2009, the bookseller has introduced two dedicated e-readers, the Nook and the Nook Color. It has expanded its market share in the e-book business to at least 20 percent and successfully used its retail stores to promote and sell its e-readers.
On Tuesday, the company is expected to unveil another e-reader at an event at its Union Square store in Manhattan, at the start of BookExpo America, a large annual publishing convention.
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