A bidding war for Barnes & Noble?

News - Bookselling Wednesday, 12 June 2019

Readerlink reported to be interested; has until the end of 13 June to make an offer

Is a bidding war breaking out for Barnes & Noble? According to a report in the Wall Street Journal, Readerlink is considering putting together a bid to top the $6.50 per share offer made by Elliott Advisors. Readerlink had previously been reported as having an interest in buying the bookstore chain. No parties connected to the B&N-Readerlink deal would comment on the report.

Under the direction of Dennis Abboud, Readerlink has moved aggressively to consolidate its position as the largest distributor of books to a wide range of non-bookstore accounts, including Target, Toys R Us, Walmart, warehouse clubs, drugstores, and food stores. The purchase of B&N would add a completely new dimension to Readerlink.

It is assumed Readerlink has until the end of 13 June to make a new offer. According to a securities filing, the merger agreement between B&N and Elliott contains a "keep-shop" provision specifying that if B&N struck a deal with a third party before 11:59pm ET on 13 June, Elliott would be entitled to a payment of up to $4 million. After that date, the breakup fee would be $17.5 million in cash.

B&N's stock price has benefited tremendously from the purchase efforts. On 30 May, its shares were trading at $4.31; they rose to $5.96 on 6 June following the report of Elliott's offer. With the report that Readerlink will still make a play for the bookstore chain, B&N's stock price closed at $6.80 per share at the end of trading on 10 June.


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