Barnes & Noble (BKS) Stock Gains On Acquisition News

Barnes & Noble BKS Stock News

Barnes & Noble, Inc. (NYSE: BKS) is up over 10% this morning after announcing that it has reached an agreement to be acquired by Elliott Management. Of course, the deal comes at a strong premium, offering an immediate return of value to investors.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

BKS Stock Rises On Deal With Elliott Management

In a press release issued just a few hours ago, Barnes & Noble announced that it has entered into a definitive agreement with Elliott Advisors (UK) Limited. Under the terms of the agreement, Elliott will acquire the company at in an all-cash transaction at a rate of $6.50 per share. Once the assumption of debt is included, the total value of the acquisition will be approximately $683 million.

Based on the $6.50 per share purchase price, the transaction is happening at a premium to the 10-day volume weighted average ending on June 5 of BKS in the amount of 43%. This is important as the rumors surrounding this transaction started to hit the wire on June 6, 2019.

In a statement, Leonard Riggio, Founder, and Chairman at BKS, had the following to offer:

We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years. In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead. I am also confident that James Daunt has the leadership ability and experience necessary to lead this great organization. I will do everything I can to help him make the transition smooth.

Having been the leader of Barnes & Noble for 54 years, I have had the privilege of working with the very best people in all the world of bookselling, including our great store managers and booksellers, who work in our stores. It is they who have made Barnes & Noble the #1 most reputable retailer in America. My profound thanks, as well, to the entire publishing world, with whom we have shared a great relationship over the years, and the many suppliers who have provided vital services. Finally, to our tens of millions of wonderful customers and Members, it has been a privilege to serve them.

Elliott Is Making Moves To Create A Global Book Selling Giant

This isn’t the only acquisition of a large book seller that we’ve seen out of Elliott. In fact, the company acquired Waterstones in June of 2018. Waterstones being the largest retail bookseller in the United Kingdom.

In fact, in the press release issued this morning, Barnes & Noble said that James Daunt, CEO at Waterstones, will also assume the role as CEO at Barnes & Noble once the transaction is complete. The idea as that with he same CEO, operating two independent booksellers, the two stores will be able to learn from eachother, creating an opportunity for both.

In a statement, JamesĀ  Daunt, CEO at Waterstones and soon to be CEO at BKS, had the following to offer:

I look forward greatly to working with the booksellers at Barnes & Noble. Physical bookstores the world over face fearsome challenges from online and digital. We meet these with investment and with all the more confidence for being able to draw on the unrivalled bookselling skills of these two great companies. As a place in which to choose a book, and for the sheer pleasure of visiting, we know that a good bookstore has no equal. I thank Mr. Riggio for his confidence, and I am grateful to Elliott for their commitment to support the continued transformation at Waterstones, and now also the same at Barnes & Noble.

Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!

The Fat Lady Hasn’t Yet Sung

Keep in mind that while the definitive agreement has been announced, the transaction isn’t quite complete yet. It is still subject to customary closing conditions as well as regulatory approval. While there seems to be no reason that the acquisition would not close, there’s always a risk that something could break up the transaction.

What Do You Think?

What is your opinion with regard to the acquisition of BKS? Join the discussion in the comments below!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.