Microsoft Corp. (NASDAQ: MSFT) owns about 16.8% of B&N’s Nook Media subsidiary and U.K.-based Pearson plc (NYSE: PSO) owns 5%.
Shares closed the day Friday up just 5.42% at $17.69, a far cry from G Asset’s $22 offer. B&N’s only comment during the day was that the company had indeed received an offer.
There are a couple of possibilities here. First, B&N doesn’t believe G is serious or that it can come up with the money. The actual offer has not been made public, so there has been some speculation about what the terms include. G made a bid of $20 a share for B&N in November that went nowhere. If G couldn’t come up with the cash for that offer, chances are it can’t come up with the cash for a higher offer.
More likely, B&N’s chairman, Len Riggio, who owns about 27% of the company’s shares, does not want to sell. Other insiders own about 7% or 8% of the stock, and it is quite likely that the insiders, including Riggio, think they’re sitting on a more valuable asset. Why they believe that is certainly a mystery, given that their bookselling business is generating lower sales than it did a year ago. The Nook Media group has been decimated by layoffs.
If G Asset Management can put real money on the table for B&N, the company would have to be crazy not to take it. The company will not be worth more in another year at the rate it is currently declining.
Shares of B&N closed at $17.69 on Friday in a 52-week range of $12.59 to $23.71. That high was reached when there was chatter that Microsoft would acquire the Nook division from B&N.
The consensus price target on the stock is $18.
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