Barnes & Noble Inc. Chairman and Founder Leonard Riggio stated he is making a bid to purchase the brick and mortar and online presence of the book retailer. Interestingly though the bid excludes the digital books business, which one would assume has the greatest growth potential, even though the e-book business looks like it will take a bit of hit a hit in Q1.
In April, Microsoft and Barnes & Noble developed a new subsidiary in the form of Nook Media. Pearson also took a stake in the company, bringing the total value of Nook Media at just shy of $1.8 billion. Under Nook Media, all tablet, digital content and college bookstores would be lumped under this business. The Nook division has thus far required a lot of investment as it has been needed to develop the infrastructure and feed research and development with launching and sustaining the platform.
While spinning off the retail-end, Riggio is betting on that a large number of people are still wanting to buy physical books. Barnes & Noble currently operates 689 bookstores which generated $996 million in sales during the quarter ending Oct. 27. An analyst has estimated the retail-side is valued at $484.5 million. The deal is expected to be made in cash.
While there are times I want to have a physical copy of a book or magazine, I find that I purchase most of my reading material through Amazon, Kindle Store or iBooks. I think the last few times I’ve been inside of a book store, it was merely a waiting area while I waited for a movie to start or for dinner reservations. But Riggio, knows quite a bit about the book business, maybe he’s got some ace up his sleeve that will turn around Barnes & Noble.
Barnes & Noble to Evaluate Sale of Retail Business
NEW YORK – (BUSINESS WIRE) – February 25, 2013 — Barnes & Noble, Inc. (NYSE: BKS), the leading retailer of content, digital media and educational products, today announced that its Board of Directors has received notice from Mr. Leonard Riggio, the Company’s founder, largest stockholder and Chairman of the Board, that Mr. Riggio plans to propose to purchase all of the assets of the retail business of Barnes & Noble. Mr. Riggio’s plans with respect to a proposal are set forth in an amendment to his Schedule 13D filed today with the SEC.
The process of evaluating a proposal and negotiation of any transaction will be overseen by a Strategic Committee of three independent directors: David G. Golden, David A. Wilson and Patricia L. Higgins, who is Chair of the Strategic Committee. The Strategic Committee has selected Evercore Partners to serve as its financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP to serve as its legal advisor.
There can be no assurance that the review of Mr. Riggio’s proposal or the consideration of any transaction will result in a sale of the retail business or in any other transaction. There is no timetable for the Strategic Committee’s review. The Company does not intend to comment further regarding the evaluation of Mr. Riggio’s proposal, unless and until definitive agreements for a transaction are entered into or the Strategic Committee determines to conclude the process.
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE:BKS) is a Fortune 500 company and the leading retailer of content, digital media and educational products. The company operates 689 Barnes & Noble bookstores in 50 states, and one of the Web’s largest e-commerce sites, BN.com (www.bn.com). Its NOOK Media LLC subsidiary is a leader in the emerging digital reading and digital education markets. The NOOK digital business offers award-winning NOOK® products and an expansive collection of digital reading and entertainment content through the NOOK Store™ (www.nook.com), while Barnes & Noble College Booksellers, LLC operates 674 bookstores serving over 4.6 million students and faculty members at colleges and universities across the United States. Barnes & Noble is proud to be named a J.D. Power and Associates 2012 Customer Service Champion and is only one of 50 U.S. companies so named. Barnes & Noble.com is ranked the number one online retailer in customer satisfaction in the book, music and video category and a Top 10 online retailer overall in customer satisfaction according to ForeSee E-Retail Satisfaction Index (Spring Top 100 Edition).