Has Barnes & Noble found its savior(s)?
When the news broke last Friday that Barnes & Noble had agreed to be acquired by hedge fund Elliott Management for $475 million in cash plus the assumption of another $200 million+ in debt, it appeared as though the struggling bookstore retailer was set to begin the next — hopefully not last — chapter in its history.
Now, however, another party has become part of the story. The book distributor, Readerlink, is seeking to raise financing to make its own bid for Barnes & Noble. Readerlink, which distributes books to retailers including Target and Walmart, was involved in the auction process for Barnes & Noble going back to October. It is planning to offer its own bid for the bookseller in advance of a deadline set for June 13, according to a Wall Street Journal report.
Elliott Management, which will receive up to $4 million if Barnes & Noble pulls out of the deal tomorrow ($17.5 million if after that date), is not new to book retailing. The hedge fund owns Waterstones, a U.K.-based chain with 293 locations. If it ultimately succeeds in acquiring Barnes & Noble, Elliott plans to have James Daunt, CEO of Waterstones, lead both businesses.
“Physical bookstores the world over face fearsome challenges from online and digital,” said Mr. Daunt in a press release issued last week. “We meet these with investment and with all the more confidence for being able to draw on the unrivalled 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.”
- Barnes & Noble to Be Acquired by Elliott, Owner of Waterstones, Bringing Together the Leading Booksellers in the US and the UK – Barnes & Noble, Inc.
- Elliott Management to Buy Barnes & Noble in $475 Million Deal – The Wall Street Journal
- Readerlink Works Toward Higher Offer for Barnes & Noble – The Wall Street Journal
DISCUSSION QUESTIONS: Would Barnes & Noble under the ownership of either Elliott or Readerlink be more likely to succeed than under current management? What changes would you expect new management to make at Barnes & Noble?