Some companies just want to remain public rather than go private. It’s truly not possible to create a one-size fits all model for evaluating what is a fair offer for a private investor group to take a company private. Every industry is different, and every company has its own culture. to take a public company private.

Barnes & Noble Education, Inc. (NASDAQ: BNED) has now rejected two unsolicited buyout proposals to take the company private. According to the press release, the company’s board of directors has taken the stance that the prior proposals were offers deemed as low-value, highly conditional and also that the proposals were not credible.

Barnes & Noble Education is a small cap stock that is worth under $200 million. it operates bookstores for college and university campuses, as well as for K-12 educational institutions. It’s three business segments are retail operations, wholesaling and digital student solutions.

An announcement was made on Monday that its board of directors had previously unanimously rejected unsolicited proposals from Bay Finance, LLC to acquire the company. Its most recent offer was said to be a cash offer of $4.50 per share that was received on June 27, 2019.

On top of the new proposal being rejected, Barnes & Noble Education said that its board had unanimously rejected an unsolicited proposal received on February 7, 2019 for a range of $6.75 to $7.25 per share in cash and another unsolicited proposal received on June 7, 2019 at a price of $5.25 to $5.75 per share in cash.

What may stand out here is that the shares had been above $7.00 as recently as March 1, 2019, and had mostly been sliding since. The stock’s closing price last Friday was just $3.56.

According to the press release, Barnes & Noble Education’s board considers that Bay’s proposals fail to recognize the value of its digital transformation and other operational initiatives which it expects to drive long-term growth and to enhance shareholder value.

As for the board considering that each of the proposals were highly conditional and not credible, the release said:

The BNED Board believes that a credible proposal must deliver compelling value and certainty. A credible proposal includes, among other things, a fully underwritten debt commitment and clearly identified and adequate equity capital that, in the aggregate, would be sufficient to complete a transaction. In addition, a credible proposal should contain sufficient detail to demonstrate that it provides market-standard provisions that assure certainty of completion. The highly conditional Bay Finance proposals do not satisfy any of these conditions… BNED today also confirmed that Bay Finance delivered a letter on June 27, 2019 purporting to nominate five candidates to stand for election to the BNED Board at its 2019 Annual Meeting of Stockholders. The notice has been ruled invalid under BNED’s Bylaws.

John R. Ryan, who is Lead Director of the Barnes & Noble Education board, said:

We are open to all opportunities to enhance shareholder value as we continue our business transformation to position BNED for success over the long-term.

While management teams rarely get excited about merger proposals which are heading in the wrong direction on price and terms, it is a fair question to ask what a fair price would be. With current market conditions having been strong in 2019, Barnes & Noble Education shares had peaked at $7.40 in late-February and were down at $3.56 prior to this latest rejection announcement.

Revenues had risen to $2.203 billion in the fiscal year-end April 28, 2018 from $1.874 billion the prior year, but the more recent fiscal year’s revenues were back down to $2.034 billion.

There are currently too few analysts for there to be a strong consensus for formal earnings and revenue expectations ahead, but the 3 analysts covering Barnes & Noble Education see revenues for fiscal 2020 as $1.98 billion with an expected earnings per share of $0.34.

Again, it’s impossible to make a one-size fits all argument for a buyout of this sort. At the same time, shares of Barnes & Noble Education have tended to slide lower and lower over time. It was a $15 stock late in 2015 and that share price has drifted lower and lower each year since despite the verdict not yet in for calendar year 2019.

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