BKS stock continues to move Friday after Elliott Management agreed to acquire Barnes & Noble Inc. (NYSE:BKS) for $476 million or $6.50 a share.
Acquisition Details
Iconic American bookstore Barnes & Noble has been in a terminal decline ever since online bookstores came into being, and over the years, the company had been fighting a losing battle with Amazon (NASDAQ:AMZN). However, after losing money for years and BKS stock price plunging progressively, the bookstore has finally caught a break.
Paul Singer’s Elliott Management Corp has offered to acquire the company for $476 million or $6.50 per share, and in addition to that, Elliott will also take up Barnes & Noble’s debts. According to the two companies involved in the deal, the total value of the deal will stand at $683 million once the debt is included.
After the news about the possible acquisition broke on Thursday, BKS stock jumped by as much as 30%, and on Friday, the shares jumped by another 12% to $6.68 once the deal was confirmed by the parties.
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Although it is true that the fortunes of big-ticket bookstores all across the world are on the decline, Elliott Management does have experience in the business and already owns the British bookstore chain Waterstones. The current Chief Executive Officer of Waterstones, James Daunt, will run the two companies jointly and try to share the same ethos across the two businesses.
Barnes & Noble used to be one of the biggest bookstore chains in the world and currently has as many as 600 locations in the United States. However, the company has not been able to get back to its former self despite trying a range of measures, one of which included the sale of merchandise unrelated to books. None of that seemed to work, and the intense competition from Amazon was perhaps the biggest reason behind its downfall.
According to analysts, the company is going to have bigger legroom to work towards restructuring the business, but there is going to be trouble in the short term.
Despite the recent jump, BKS stock is still down 7% for this year.
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