G Asset Management Offers to Buy 51% of Barnes & Noble
Investment Firm Says Company Should Reconsider Splitting Retail, E-Reader Businesses
Private investment management firm G Asset Management LLC offered to acquire a majority interest in Barnes & Noble Inc. BKS +6.32% and said the company should split its retail and e-reader businesses.
A representative for Barnes & Noble said the company had no comment beyond confirming that they have received the offer, which values the company at $1.31 billion, based on its shares outstanding.
The offer is for 51% of Barnes & Noble at $22 a share, a 31% premium to Thursday's closing price. G Asset Management said Friday that the offer is an increase from the firm's November proposal to the board, which valued the company at $20 a share.
The firm also proposed to acquire 51% of the bookseller's Nook e-reader and e-books segment, valuing Nook at $5 per share. G Asset Management said it was confident that if the Nook segment was separated from the profitable retail and college business, substantial shareholder value would be created.
The announcement sent Barnes and Noble shares higher Friday, with the stock rising as much as 14% before surrendering some of those gains.
Representatives from G Asset Management were unavailable for further comment Friday.
Barnes & Noble in August abandoned any plans to split up the company. After considering the idea for 18 months, it said it had decided not to divide its retail stores from its Nook operations. Instead, it will focus on managing its current businesses. Additionally, Leonard Riggio, its chairman and largest shareholder, had decided against going forward with a personal offer to buy the company's roughly 675 consumer bookstores.
The decisions came soon after Barnes & Noble abruptly scaled back its costly pursuit of becoming a big player in the tablet computer market, saying it would stop manufacturing the devices. That announcement was followed by the resignation of Chief Executive William Lynch, who was instrumental in Barnes & Noble's push to compete in tablets against Apple Inc. AAPL -0.85% and Amazon.com Inc. AMZN -0.66%
Barnes & Noble in November reported its fiscal second-quarter profit jumped as the company cut costs, masking a bigger-than-expected decline in revenue.