Elliott Management Eyes Barnes and Noble

June 20, 2019 | Hedge Funds, News

Deal could be worth $475 million, says the Financial Times

An Elliott Management-Barnes and Noble marriage appears eminent.

Activist hedge fund Elliott Management, owned by billionaire Paul Singer, may acquire the book chain for $476 million, according to The Financial Times.

Singer would likely scale up the book business with this deal. The firm previously acquired UK book retailer Waterstones last year. His offer is likely to be in the range of $6.50 per share.

The Elliott Management-Barnes and Noble Deal

The deal is likely the result of its internal committee’s efforts to find a buyer. That committee formed in 2018.

Elliott Management may find value in the ongoing restructuring of the book chain in recent years. The company has closed unprofitable stores and relocated them to better locations.

The chain doesn’t carry too much debt. In addition, despite competition from Amazon, it clocked sales of $3.6 billion last year. That figure was a decline of just 3.1% compared to the previous year.

…But weak earnings likely

Barnes and Noble’s shares have declined about 25% year-to-date.

In March, Barnes and Noble warned investors that full-year earnings may disappoint. The firm cited weak sales momentum and slowing store traffic.

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