Barnes & Noble Sale: What Does The $683 Million Deal Mean For The Bookseller?

Barnes & Noble (BKS) has announced that it will be acquired by Elliott Advisors Limited for approximately $683 million in an all-cash offer. Elliott, who acquired U.K. bookseller Waterstones in June 2018, will also assume Barnes & Nobles’ debt.

The purchase price was based on $6.50 per share with Barnes & Noble’s common stock ending on Wednesday.

Barnes & Noble made the decision to sell following its Strategic Alternative Review, which it announced in October 2018. The company’s board of directors unanimously approved the purchase.

When the transaction between the two companies is complete, James Daunt, CEO of Waterstones will lead Barnes & Noble as CEO of the company. He will be based in New York. He will also oversee Waterstones in his position.

Through the purchase, Barnes & Noble said, Elliott is looking to build upon the foundation that the bookseller has already built in the U.S. while addressing the challenges that brick and mortar retailers are facing in the market. Both Barnes & Nobel and Waterstones will operate independent of each other but will draw on each other’s synergies, CNBC reported.

Barnes & Noble expects the transaction to close in the third quarter of 2019. Shareholders of the company will receive a quarterly cash dividend of $0.15 per share on Aug. 2. The deal is being structured as a merger, according to the company.

Leonard Riggio, founder and chairman at Barnes & Noble said in a statement about the deal, that “Having been the leader of Barnes & Noble for 54 years, I have had the privilege of working with the very best people in all the world of bookselling, including our great store managers and booksellers, who work in our stores. It is they who have made Barnes & Noble the #1 most reputable retailer in America.

“My profound thanks, as well, to the entire publishing world, with whom we have shared a great relationship over the years, and the many suppliers who have provided vital services. Finally, to our tens of millions of wonderful customers and Members, it has been a privilege to serve them,” he added.

Barnes & Noble is utilizing financial advisor Evercore and Baker Botts L.L.P. as its legal advisor to the Special Committee of the company. Guggenheim Securities is acting as the financial advisor, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is the legal advisor to the Board of Directors at the company.

Elliot is working with Credit Suisse Securities L.L.C. as its financial advisor, and Debevoise & Plimpton LLP is its legal advisor.

Barnes & Nobel has 627 locations that are located across all 50 states. The bookseller said on its website that it sells approximately 190 million physical books a year.

Shares of Barnes & Noble stock were up 11.41 percent as of 10:55 a.m. ET on Friday.