Liberty Media Proposes to Buy Barnes & Noble

Liberty Media Wants to Buy 70% of B&N for $1 Billion

by Anton Shilov
05/20/2011 | 10:29 AM

Liberty Media Corp. announced this week that it had made a proposal to acquire Barnes & Noble for $17 per share in cash. In total, the company hopes to control 70% of B&N, a major book retail in the U.S. that has been attempting to enter the market of electronic books, for around $1 billion.

 

Liberty's proposal, which contemplates that the acquisition will be structured as a merger, is subject to various conditions, including satisfactory financing and the participation of founding chairman Leonard Riggio, both in terms of his continuing equity ownership and his continuing role in management. Liberty's equity ownership, which would be attributed to the Liberty Capital group, is expected to be approximately 70% of Barnes & Noble. Liberty expects that its cash contribution toward the purchase price, depending on the amount of financing that can be obtained, will be in the range of $500 million.

Barnes & Noble is the established leader in bookselling and is at the forefront of the transition to digital, with a management team that has demonstrated expertise in operations and positioned the company for growth in a dynamic marketplace, according to Liberty Media. Unfortunately, B&N's Nook e-book reader is substantially less successful than Amazon's Kindle.

The acquisition of B&N by a major media company will mark a renewed interest for books in general. It is highly likely that Liberty will strengthen B&N's digital strategy.