Barnes & Noble +14% after Schottenfeld Management last night disclosed that it had increased its active stake to 6.9% (Prior 5.7%) and that it believes that the Company represents an attractive acquisition target
- The Reporting Persons believe that high quality additions to the Company's board and management team would immediately enhance value both through improved operational performance and in the event of a sale. In that regard, Mr. Schottenfeld is engaged in discussions with Mr. Riggio regarding the recommendation of experienced and qualified individuals whom Mr. Schottenfeld believes would significantly contribute to the development and execution of the Company's strategic and operating plans.
- The Reporting Persons strongly believe that the Company represents an attractive acquisition target. At an enterprise value of roughly 2.5x management's reiterated EBITDA guidance for the 2019 fiscal year, the Company's shares represent a truly unusual bargain in the retail sector, especially considering the Company's low seasonal-based leverage needs, 12% dividend, and the stabilizing same-store-sales trajectory of the past few months. Moreover, the Reporting Persons believe there are clear opportunities for immediate operational improvements..
- The Reporting Persons are encouraged by recent third-party disclosure that the Company engaged in sale transaction discussions with a potential strategic acquirer as recently as June 2018, and believe that there will be additional and broadening interest from potential acquirers. The Reporting Persons encourage the Company to continue in its efforts to explore and seriously consider all available sale transaction opportunities.