Barnes & Noble (BKS, $6.95) Contemplates Selling Itself - Stock Climbs +20%

Barnes & Noble, Inc. might want to sell the company. Its stock jumped +20% on the news.

On Wednesday, the book store chain said that it has appointed a committee to review acquisition offers, including the one that came from chairman Len Riggio who currently owns 20% of the company’s equity. According to the Barnes & Noble board, Riggio would vote his shares in favor of any transaction recommended by the review committee. Also, an investor holding a 7% stake has reportedly expressed his interest in buying the company to Riggio .

Barnes & Noble also suggested that an unidentified shareholder is apparently trying to aggressively increase their stake in the company. Should the unidentified party accumulate 20% of the stock or more, the firm will implement the poison pill – which will allow shareholders to buy Barnes & Noble's stock at a 50% discount thereby diluting the value of the shares. The company plans to take this step in order to prevent a hostile/unapproved takeover.

Sales at Barnes & Noble have declined during each of the past four years. Last year, same-store sales dropped 6.1% compared to the previous year.