Nation & World

Barnes and Noble sells to hedge fund

Deal set at almost $476 million

Liz Martin/The Gazette

Members of the Creative Coloring Club meet at the Barnes and Noble in Cedar Rapids in this 2015 photo.
Liz Martin/The Gazette Members of the Creative Coloring Club meet at the Barnes and Noble in Cedar Rapids in this 2015 photo.

Barnes and Noble said on Friday it would be bought by hedge fund Elliott Management Corp for $475.8 million, marking the end of the once-dominant U.S. book retailer as a public company after years of falling sales.

Listed on the New York Stock Exchange since 1993, Barnes and Noble has struggled to grow its business since the arrival of Amazon.com turned the book sales market on its head.

Even the company’s recent efforts to pull in a more tech-savvy audience with its Nook e-book reader failed to compete with Amazon’s Kindle and other tablets.

Elliot’s offer of $6.50 per share represented a premium of about 42 percent to Wednesday’s close, the day before media reports of a potential transaction first surfaced.

Barnes and Noble has been exploring options for a buyout since at least this past October, with multiple parties showing interest including founder-chairman Leonard Riggio.

Riggio acquired the flagship retailer’s trade name in 1970s, nearly a century after Charles Barnes started the business in his Illinois home.

Riggio grew the business, adding several retail stores across the country, but could not sustain the growth in a retail landscape dominated by Amazon.

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In 2014, the chain closed its New York Fifth Avenue store — once the world’s largest bookstore — and has faced declining sales for at least the last three years.

As of this January, it ran 627 retail stores.

To help turn around the company’s fortunes, Elliott is bringing in the CEO of British bookshop chain Waterstones, James Daunt, to take the helm at Barnes and Noble.

The chain said Waterstones, which was bought by Elliott last year, has successfully restored itself to sales growth and sustainable profitability under Daunt.

While Daunt will lead both companies, the two booksellers would still operate independently.

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