Biggest US bookseller up for sale
Barnes & Noble, the number one US book store chain, is putting itself up for sale as business suffers in the high-stakes battle for a leading role in the digital books market.Updated: Aug 04, 2010, 22:22 IST
Barnes & Noble, the number one US book store chain, is putting itself up for sale as business suffers in the high-stakes battle for a leading role in the digital books market.
Barnes & Noble, whose shares soared 25 per cent on the news, said company founder and top shareholder Leonard Riggio is considering bidding for the company as part of a larger investor group.
An auction for Barnes & Noble could draw interest from several other quarters, including billionaire investor Ron Burkle, as well as raise speculation about a combination with smaller rival Borders Group Inc.
But valuing a deal for Barnes & Noble, beset by competition from the likes of Amazon.com Inc and Apple Inc in the electronic books market, could prove difficult.
The pressure on Barnes & Noble to realign its strategy became clearer in June, when it reported a larger loss as it spent money to develop its Nook electronic reader, which is outgunned in the market by Amazon's Kindle and Apple's iPad.
But the potential for profits from the mass adoption of e-books is great. Barnes & Noble Chief Executive William Lynch said recently the company has a 20 percent share of the e-books market, a position that could lead to sales of $3 billion to $5 billion by 2013.
The company’s share price has lost more than half its value in the last year and its market capitalisation was just under $760 million (R3,511 crore) as of Tuesday’s close. Reuters