NEW YORK – Investment firm G Asset has offered to buy 51 percent of the Barnes & Noble bookstore chain for about $672 million. The New York firm says its offer is for $22 per share, 31 percent above the stock’s closing price on Thursday. Barnes & Noble has about 60 million shares outstanding.
G Asset says Barnes & Noble is “substantially undervalued.” The retailer is trying to turn around its results as more consumers buy books online or in a digital format. The New York company’s sales fell 6.6 percent at its bookstores and online during the critical holiday shopping season. It has invested heavily in its Nook e-book business, but sales in that unit are also dropping.
If the bid were successful, G Asset would spin off the Nook business into its own venture, separate from Barnes & Noble’s retail stores and college bookstores.
It’s unclear how serious the offer is, David Strasser, an analyst at Janney Montgomery Scott LLC in New York, said in a note to clients.
“We do not know how secure the financing is for this deal or how real the offer is at this time,” Strasser, who has a neutral rating on the stock, said in the note. Barnes & Noble “has tried to sell the business in the past and could not agree on price for these assets, and we are unsure if this would be agreeable.”
New York-based Barnes & Noble said Friday that it has received the offer but did not comment further.
After the midday surge triggered by G Asset’s statement, the stock pared its initial gains. It closed at $17.69 in New York, up 5.4 percent. The shares have climbed 18 percent this year.
This isn’t G Asset’s first dance with the bookseller.
The firm, managed by Michael Glickstein, a former director of research at hedge fund Mercer Partners, made an offer to buy 51 percent of Barnes & Noble’s bookstore business in 2012. G Asset wanted to spin off the chain’s college bookstores under that plan, but nothing came of that offer.
Then G Asset last November offered $20 per share for a 51 percent stake in Barnes & Noble.
G Asset also has another idea for Barnes & Noble. Instead of bidding for 51 percent of the whole company, it could buy a controlling stake in Barnes & Noble’s Nook e-reader and e-book business, valuing it at $5 per share.
Barnes & Noble began reporting its Nook business sales separately from its retail business in late 2012 as it evaluated ways to become more profitable.
Founder Leonard Riggio in early 2013 said he wanted to acquire the company’s stores and website, but not the business that makes the Nook readers. He later withdrew that bid.