Liberty Media offers $1B for Barnes & Noble stake

Company made its intentions known yesterday. If Barnes & Noble approves the deal, Liberty will have a 70 percent equity stake in the company.

The Nook Color is among the reasons that Liberty Media wants Barnes & Noble. Barnes & Noble

Barnes & Noble may soon have a new majority owner.

Liberty Media, a conglomerate with its fingers in everything from the QVC and Starz channels to Expedia and Evite to SiriusXM Radio, announced yesterday after market close that it has offered Barnes & Noble $17 per share, or about $1 billion, for a 70 percent stake in the book retailer.

The offer represents a sizable 20 percent premium on Barnes & Noble's closing stock price yesterday of $14.11. In after-hours trading, the book retailer's shares soared to $17.95.

Liberty Media's acquisition bid comes at an interesting time in the book-retail market. Barnes & Noble's biggest competitor--Borders--recently went bankrupt under pressure from online alternatives, like Amazon.com, and from digital content.

Barnes & Noble has not been immune to those changes. Over the last several years, the company's profits have dwindled from over $150 million during the fiscal year ended February 2007 to $36.7 million last year.

However, Barnes & Noble has been quick to jump into the e-book arena with its Nook e-reader. Earlier this year, Barnes & Noble announced that its Nook had 25 percent of the e-book market . The Nook's competitors include Amazon's Kindle, Apple's iPad, and Sony's Reader. Barnes & Noble said at the time that it was selling "twice as many e-books as all formats of physical books combined on BN.com."

Meanwhile, Nook Color was recently updated with Android 2.2 (Froyo), helping Barnes & Noble transform the $249 device from a standard e-reader to a full-fledged tablet.

That digital transition hasn't gone unnoticed by Liberty Media. The company said in a statement that Barnes & Noble "is at the forefront of the transition to digital."

For its part, Barnes & Noble offered a low-key response. The company said yesterday that a board of directors' special committee will determine whether the offer is in the bookseller's best interest. The company cautioned shareholders that there is no assurance that a deal will pan out.

If Barnes & Noble accepts the deal, Liberty Media will require the bookseller's founding chairman, Leonard Riggio, to stay on as an equity owner and as part of management.

 

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