Borders SEC filing hints at Barnes and Noble talks

Borders might buy out Barnes & Noble in what could be a major shakeup in the e-reader space, according to an SEC filing. Borders has said it might buy its rival bookseller for $16 per share or else a mixture of cash and stock. There is "no assurance" that a deal will be finished, Borders cautioned.

Neither of the companies has elaborated on the state of talks.

An acquisition would be a surprise in the industry, where Barnes & Noble has been performing well and hasn't had pressure to sell itself off. Borders, however, has had only limited success with devices like the Kobo Wireless eRreader and may be eager to take a major leap in the category by buying a rival that claims to have 20 percent of the market. Concerns might also exist that Apple could encroach on its territory, since more are using iPads for reading than there were in April and could lure customers away from both users.

A buyout could create problems for Kobo as it depends on Borders as its chief US partner but would directly run into conflict with the Nook lineup. The Nook would be the more likely to survive due to its brand recognition as well as its use of Android and more advanced options, such as 3G and color models. [via Barron's]

By Electronista Staff