Barnes & Noble to Be Acquired by Waterstones Parent Elliott in $683 Million Deal

9:31 AM, Jun 7, 2019 — Barnes & Noble (BKS) will be acquired by an affiliate of Elliott Management that also owns the largest retail bookseller in the UK, in a deal valued at $683 million as the chain faces growing competition from e-commerce that’s weighed on sales.

The takeover will see the New York-based bookstore founded by Chairman Leonard Riggio bought for $6.50 a share in an all-cash deal, a 43% premium to the closing price on Wednesday, a day before rumors of the transaction were reported, it said in a statement Friday.

“We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years,” Riggio said. “In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead.”

Shares in the retailer were up nearly 11% in early trading Friday, after surging 30% by the close the day earlier.

When the deal closes, Elliott will own both Barnes & Noble and Waterstones, the UK chain that has 293 bookstores and branches in Ireland, Brussels and Amsterdam. While the companies will operate independently, Waterstones Chief Executive James Daunt will also take over the helm of the US retailer.

Riggio said he will “do everything I can” to ease Daunt’s transition.

Barnes & Noble has been struggling with growing competition from online commerce including (AMZN), which has been a rival in book sales for several years amid the growth of digital readers. In the fiscal third quarter reported in March, sales were flat year-on-year at $1.2 billion, but a comparable store sales growth of 1.1% was the “best quarterly performance in several years,” it said at the time.

“Physical bookstores the world over face fearsome challenges from online and digital,” said Daunt. “We meet these with investment and with all the more confidence for being able to draw on the unrivaled bookselling skills of these two great companies. As a place in which to choose a book, and for the sheer pleasure of visiting, we know that a good bookstore has no equal.”

The Elliott takeover caps a strategic review process that Barnes & Noble announced last October. The retailer’s board has approved the deal and is recommending the takeover to shareholders, who still need to vote on the plan. Regulators also need to approve the deal, which is expected to close in the third quarter of this year.

Companies: Barnes & Noble, Inc.
Price: 6.61 Price Change: +0.65 Percent Change: +10.91

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