Barnes & Noble Buyout Considered By Chairman, Nook Split Eyed

A Barnes & Noble buyout is on the table, reports indicate, as the company weighs its future between the sluggish retail market for its bricks and mortar stores versus the uptrending prospects for the company’s popular Nook ereader.

News of a Barnes & Noble buyout follows two years of net losses for the chain, as readers increasingly embrace the digital publishing formats offered by devices like the Nook tablet.

Bloomberg reported on the potential Barnes & Noble buyout, explaining that the move is being considered after four decades of business built on store sales and paper books.

The site says a potential company split is part of the plan, breaking off the Nook tablet business and the college bookstore business from the Barnes & Noble locations commonly found in shopping centers and malls:

“Barnes & Noble Inc. (BKS) founder and Chairman Leonard Riggio said he plans an offer to buy the retail assets of the bookstore chain he founded more than 40 years ago as it struggles to return to profitability … The price would be negotiated with the board, and the buyout would be funded primarily with cash, Riggio said today in a filing with the U.S. Securities and Exchange Commission. The proposal would exclude Barnes & Noble’s Nook and college businesses, he said.”

Nook Video Service

NASDAQ covered the potential Barnes & Noble buyout, adding that while stock performance has been overall weak, shares jumped on the news:

“Shares jumped 18% to $15.90 in recent premarket trading. Through Friday’s close, the stock has dropped 12% in the past three months … According to a filing with the U.S. Securities and Exchange Commission, Mr. Riggio on Monday notified Barnes’s board that he has plans to offer to buy the bookseller’s retail business … In a statement, Barnes & Noble said a strategic committee of three independent directors–including its strategic committee chair, Patricia L. Higgins–will evaluate Mr. Riggio’s proposal and potentially negotiate a deal. There is no timetable for the strategic committee’s review.”

The Barnes & Noble buyout would, if it occurs, partition off 689 retail outlets from the rest of the business.