Barnes & Noble Inc (BKS.N) said on Thursday a deal proposed by an activist investor to take the bookstore chain private was not “bona fide” as its chairman and founder, Leonard Riggio, would not participate and raising the required funds was highly unlikely.
(Reuters) – Barnes & Noble Inc (BKS.N) said on Thursday a deal proposed by an activist investor to take the bookstore chain private was not “bona fide” as its chairman and founder, Leonard Riggio, would not participate and raising the required funds was highly unlikely.
Sandell Asset Management had proposed to take Barnes & Noble private with the help of current shareholders and $500 million in debt financing in a deal that valued the company at more than $650 million, or over $9 per share, the Wall Street Journal reported earlier, citing people familiar with the matter.
Barnes & Noble’s shares closed up about 8 percent at $7.13. They hit a session-high of $7.80 after the WSJ report, valuing the company at $566.5 million.
ConsumerEdge Research analyst David Schick said private equity could make sense for the company as it “has the potential to change its strategy as a private company – work on membership, NOOK, store layout, and traffic drivers.”
Sandell had in July urged Barnes & Noble to sell itself, saying the retailer could fetch at least $12 per share and attract media or internet companies seeking a retail presence.
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