Barnes & Noble to be acquired by Elliott for $6.50 per share in all cash deal
Barnes & Noble (BKS) announces that it has entered into a definitive agreement to be acquired by funds advised by Elliott Advisors for $6.50 per share in an all-cash transaction valued at approximately $683M, including the assumption of debt.
Barnes & Noble has faced continued pressure from Amazon and independent booksellers. Its shares had fallen roughly 25% year to date before the news leak. Within the past five years, Barnes & Noble has lost more than $1 billion in market value.
Elliott’s acquisition of Barnes & Noble, the largest retail bookseller in the United States, follows its June 2018 acquisition of Waterstones, the largest retail bookseller in the United Kingdom.
James Daunt, CEO of Waterstones, will assume also the role of CEO of Barnes & Noble following the completion of the transaction and will be based in New York.
The $6.50 per share purchase price represents a 43% premium to the 10-day volume weighted average closing share price of Barnes & Noble’s common stock ended June 5, the day before rumors of a potential transaction were reported in the media.
As a private company, Barnes & Noble will likely be more free to make the changes and investment that can be unwieldy under a public spotlight. Part of the bookseller’s turnaround plan has included closing some of its more than 600 stores across the U.S. and relocating to smaller spaces that receive a fresh and modern look. The company has said its prototype stores encourage shoppers to buy books online or from a tablet.
The retailer has shown small signs of upturn. In March, it reported that over the holidays, sales at locations open for at least a year during the quarter rose 1.1 percent — its best quarterly performance in three years. As of January, it had $15 million in cash and cash equivalents.
The announced transaction with Elliott is the culmination of an extensive Strategic Alternative Review conducted by the Special Committee of the Barnes & Noble board, which was announced on October 3, 2018.
The board of Barnes & Noble unanimously approved the transaction and recommend the transaction to Barnes & Noble shareholders.
Leonard #Riggio, the Founder and Chairman of Barnes & Noble, has also entered into a voting agreement in support of the transaction.
The transaction is subject to customary closing conditions, including the receipt of regulatory and stockholder approval, and is expected to close in Q3.
The merger agreement provides for the acquisition to be consummated through a merger structure. However, the parties expect to amend the agreement to utilize a tender offer structure, which is expected to reduce the time to closing by a number of weeks.
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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.