Barnes and Noble going private after battle with Amazon

A view inside Barnes & Noble 82nd Street

New York City. Noam Galai WireImage

Very likely Barnes & Noble, with its almost 630 stores and Amazon always in the background, will need to shrink some more and keep tinkering with its merchandising, stores and engagement. Under the deal, Waterstone's chief executive officer James Daunt will become CEO of Barnes & Noble.

When Barnes & Noble listed on the New York Stock Exchange in 1993, it had a market capitalization of around $800 million.

He pursued aggressive expansion throughout the 1980s and established Barnes & Noble as a national phenomenon with the acquisition of B. Dalton Bookseller and its 797 locations in 1987.

Elliott Advisors, which manages the company's United Kingdom holdings, acquired that country's leading bookseller, Waterstones, last June. And now that Barnes & Noble will be a private company, it no longer has to worry about quarterly sales reports and continued unfavorable comparisons to Amazon from Wall Street. But it is just half of where the stock traded less than three years ago. Along the way, it's weathered self-inflicted wounds and internal drama. Its revenue peaked in 2012, and it has fallen every year since.

Including the assumption of debt, the deal is worth about $683 million.

Elliott Advisors has also previously purchased Waterstones, U.K's largest book chain, back in June 2018. It's a bittersweet ending for Riggio, no doubt, but turning a page on what is still America's largest bookstore chain is better than the alternative.

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The company's Nook e-reader device was also a flop, never catching on in the way that Amazon's Kindle did.

Barnes & Noble's reported sales growth of 1.1% for the holiday quarter ended January 26 (in stores that had been open at least a year.) That was the company's best quarterly sales growth in several years.

Elliott will pay $6.50 per share for all shares of the company.

Now with 168 superstores, Barnes & Noble has become the Home Depot of the book superstore business.

"Physical bookstores the world over face fearsome challenges from online and digital", Daunt said in a statement. "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".

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