Time To Turn The Page? Barnes & Noble Pops On Sandell Takeover Bid

Barnes & Noble, Inc. (NYSE: BKS) spiked 16 percent Thursday on talk of a $9-per-share take-private bid by Sandell Asset Management.

The price represents a steep decrease from Sandell’s earlier suggested sale price of $12 per share. The prospective buyer first urged a sale in July when it appraised the company and its real estate above its “unconscionably low” $520 million valuation.

"It is our opinion that the public market for retail stocks is contributing to a risky and inhospitable environment under which the stock price of Barnes & Noble may not fairly reflect its intrinsic value anytime in the foreseeable future if it remains a standalone company," Sandell’s letter said.

Barnes & Noble said in a Thursday afternoon statement that Sandell's proposal is not genuine.

The proposed $650 million take-private transaction would necessitate $500 million in debt financing and require shareholders including Chairman Leonard Riggio to roll their stakes into a new private entity, according to the bookstore chain.

"Mr. Riggio has no intention of rolling his shares into such a transaction, and the company believes a debt financing of $500 million is highly unlikely." 

A Downward Trend

Despite the prospective buyer’s assessment, Barnes & Noble stock has echoed retail peers, trading down nearly 33 percent year-to-date and 78 percent over the last 10 years.

The waning rate was suspected to have attracted widespread interest. In August, Barnes & Noble denied rumors of buyout talks, which at the time were speculated to include Apollo Global Management (NYSE: APO) and Platinum Equity.

At the time of publication, neither Sandell nor Barnes & Noble had responded to requests for comment. Shares were trading up 12.5 percent at a rate of $7.43.

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