A NOVEL SOLUTION
Barnes & Noble could go on the sale table
Barnes & Noble’s next biggest seller could be itself.
The beleaguered book retailer announced on Wednesday that it is forming a committee to review strategic alternatives for the company after receiving “expressions of interest from multiple parties.”
One of those suitors is none other than Barnes & Noble founder and Chairman Leonard Riggio, who has a 19.2 percent stake in the company, including shares held by his foundation.
The other potential bidders were not named.
Barnes & Noble shares soared more than 23 percent in after-hours trading as investors — some of whom had long been pushing for a sale — had new reason to believe one would be completed.
Although Riggio, 77, expressed interest in buying Barnes & Noble, he “committed to support and vote his shares in favor of any transaction recommended by the Special Committee,” Barnes & Noble said in a statement.
The bookseller may have had extra reason to rapidly form a committee.
Barnes & Noble said it “observed rapid material accumulations of its stock” and the buyers “cannot be identified.”
In addition to launching the special committee Wednesday, Barnes & Noble enacted a poison-pill plan to protect against a hostile takeover.
Wednesday’s move marks another twist in a tumultuous year for the book giant.
In August, Barnes & Noble was sued by now-former CEO Demos Parneros. The ousted Parneros alleged that Riggio “fabricated” reasons to fire him in July — weeks after an unnamed book retailer withdrew its offer to buy the company.
Parneros, who was Barnes & Noble’s fourth CEO in five years, said Riggio used trumped-up allegations of sex harassment to throw the book at him — allegations that made him “unhireable,” he claims.
Barnes & Noble called the suit, which was filed in the Southern District of New York, an “attempt to extort money from the company.”
Before Wednesday’s afterhours surge, shares of Barnes & Noble were down 18.5 percent for the year as the brickand-mortar retailer has had to fend off competition from Amazon.
Over the last few years — amid worrisome results — the bookseller has been a popular target for activist investors, including Sandell Asset Management and Jana Partners.
In August 2010, Barnes & Noble formally conducted a review process when it was facing pressure from billionaire activist Ron Burkle.
A year later, Liberty Media made a $204 million investment in the firm — then equal to a 16.6 percent stake — after withdrawing a bid to buy the company outright.
Now, with Parneros out, Riggio — the largest stakeholder — is once again acting as the CEO while it searches for a new one.
But on Wednesday — before the company announced the strategic review — it was reported that Barnes & Noble had yet to pick a recruiting firm.
“The company needs me right now. We’ll see for how long,” Riggio told The Chicago Tribune on the sidelines of the company’s shareholder meeting on Wednesday.