Barnes & Noble will be acquired by the hedge fund Elliott Management, it announced on Friday for a whopping $683 million.
The biggest bookstore in the country has been falling from grace in recent years, but an activist firm stepped up to save it. According to a report by CNBC, Elliott Management announced plans to buy Barnes & Noble for a total of $683 million, including the retailer’s debts.
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News of the deal leaked on Thursday, sending the stock skyrocketing up on Friday. It rose to peak at $6.70 per share and ended the day just over 10% up at $6.62 per share. However, for the purposes of the deal, Elliott Management is valuing the stock at $6.50 per share, a 43% premium to Barnes & Noble’s 10-day volume weighted average closing share price as of Thursday.
So far, financial analysts have judged the deal between Barnes & Noble and Elliott Management to be fair. They do not foresee another bidder coming in with a higher offer, although that possibility may have helped drive enthusiasm on Friday morning.
Barnes & Noble is reportedly allowed to operate under a “keep-shop” provision, which stipulates that the company can strike a better deal if they find one before the end of the day on June 13.
Of course, Barnes & Noble has taken a hit since the rise of Amazon and online shopping in general. The store has made big efforts to keep up with the changing times, but shares had reportedly fallen about 25% year to date before the deal with Elliott Management leaked. In the last five years, Barnes & Noble has lost over $1 billion in market value.
The company was founded in 1965, with current chairman Leonard Riggio at the head. Riggio reportedly supports the deal with Elliott Management. Last year, he stated publicly that the company had received “expressions of interest” from “multiple parties” and it was exploring its options.
Meanwhile, Elliott Management already has a vested interest in the bookselling market. Last year, the company acquired Waterstones, the largest book retailer in the U.K. Owning both may give the company leverage amongst publishers, and synergies when it comes to inventory, distribution and other factors.
For fans of bookstores, the deal simply promises that there will be Barnes & Noble stores open for the foreseeable future. The company represents one of the last brick-and-mortar locations where people can get a wide selection of books, and some are not ready to say goodbye to that just yet.
