Barnes & Noble Inc. shares jumped 30 percent in U.S. trading to a higher price than a buyout offer by John Malone’s Liberty Media Corp., suggesting investors are expecting an increased bid.
Douglas County-based Liberty Media offered $17 a share, the New York-based bookstore said Thursday in a statement, a 20 percent premium to Thursday’s closing price. The shares advanced $4.22 to $18.33 in New York Stock Exchange composite trading.
“There is a solid chance of an improved offer,” Michael Souers, a retail equities analyst with Standard & Poor’s who recommends holding the stock, wrote in a note Friday.
Barnes & Noble, facing increasing competition as more consumers buy electronic readers such as Inc.’s Kindle, hired Lazard Ltd. last year to explore a sale.
Barnes & Noble makes the Nook e-reader, and some potential bidders balked at a purchase because of how long it may take the chain to generate more digital sales, two people said last month.
“It’s making a bet on an industry that is rapidly changing with every download being a vote against Barnes & Noble’s business model for brick-and-mortar stores,” said Brian Sozzi, a retail analyst for Wall Street Strategies in New York. “Every time somebody goes out and buys an iPad or a Kindle, Barnes & Noble’s assets are depreciating.”
A board committee will evaluate the proposal, which values the company at about $1 billion and is subject to an accord and to shareholder and regulatory approvals.
Liberty Media, controlled by billionaire Malone, holds stakes in the Starz Group media business, Sirius XM Radio Inc. and HSN Inc., the home-shopping retailer.
Under Liberty’s plan, Barnes & Noble chairman Leonard Riggio would maintain his about 30 percent equity stake and a management role in the company. Liberty would own 70 percent, it said in a separate statement.
Liberty will contribute about $500 million in cash and finance the rest of its stake, it said.
In its statement, Liberty cited the bookseller’s management team and transition to digital formats as drivers for growth.
