updated 06:35 pm EDT, Tue August 3, 2010
Barnes and Noble mulls sale to save firm
Barnes & Noble today surprised the industry by revealing that it was contemplating "strategic alternatives" that could involve selling itself. In a statement, the company believed its shares were priced well below expectations and had recruited an independent committee to research its choices to boost the company's fortunes. One option was a takeover by founder and majority stakeholder Leonard Riggio as part of an investor group.
The bookseller was cautious and warned that any deals could be partial or may not happen at all depending on the verdict of the committee.
Barnes and Noble has so far been successful in e-books through the launch of the Nook and reading apps for multiple mobile platforms, but the shift to digital and its overall performance has hurt its physical stores as readers have either flocked to competitors or stayed at home. It has gone so far as to install Apple-like sections to promote the Nook in a bid to offset falling paper book sales.
It has touted ownership of a significant piece of the market, but Amazon has disputed its claims as it believes the Kindle still has a dominant share. Apple is also believed to have encroached on the Nook's territory as customers either want to upgrade to the color, touchscreen iPad or already own it and don't need a dedicated e-paper device. A sale of the company could give it the financial health to increase its scale.
Shares of Barnes & Noble spiked a very large 27 percent in after-hours trading following the word of a possible buyout.