Barnes & Noble, Inc.
) saw its shares rise 5% after private investment firm, G Asset
Management, reportedly offered to buy a majority stake in the
As per media reports, G Asset has offered to buy 51% stake in
Barnes & Noble for $22 per share, a 31% premium on Thursday's
closing price. The current offer is an increase from the
company's Nov 2013 bid of $20 per share. Alternatively, G Asset
has offered to buy an equal stake in Barnes & Noble's
struggling digital reading business, NOOK, for $5 per share.
Other than NOOK, the company operates through the Retail
segment (which consists of Barnes & Noble bookstores and
e-Commerce website, BN.com) and College Booksellers segment
(consists of bookstores in colleges and universities across the
U.S.). Both these businesses are more profitable than NOOK.
Per media reports, G Asset has been pushing Barnes & Noble
for quite some time to separate the unprofitable NOOK division
from its bookstore and digital businesses. According to G Asset,
separating the two businesses would unlock substantial
NOOK division handles Barnes & Nobles' digital business
including digital content, devices and accessories. It was
developed to expand the company's digital business and better
compete with behemoths like
NOOK has been in the doldrums for quite some time. The company
reported a massive fall of over 60.5% in revenues generated from
the division during the holiday season (nine weeks ended Dec 28,
2013). Management blamed the lack of new products and severe
competition as the primary reasons. Earlier too, the company had
reported a 32.2% year-over-year revenue decline in the division
in second-quarter fiscal 2014 (ended Oct 26, 2013).
Barnes & Noble carries a Zacks Rank #3 (Hold). A
better-ranked stock in the retail sector is
) carrying a Zacks Rank #2 (Buy).
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