Elliott Management announced it has reached an agreement to buy Barnes & Noble for $476 million.
In a statement, the companies said Elliott agreed to pay $6.50 per share in an all-cash transaction, a 43% premium over Barnes & Noble’s 10-day weighted average closing share price before news of an imminent deal leaked Thursday. Year-to-date, the company’s shares had fallen about 25%.
Including the assumption of debt, the deal is worth about $683 million.
Elliott Management also owns the U.K. bookstore chain Waterstones. Under the deal, Waterstone’s chief executive officer James Daunt will become CEO of Barnes & Noble. Leonard Riggio, the founder and chairman of Barnes & Noble, entered into a voting agreement in support of the transaction.
Elliott said it would pursue a strategy similar to the one used at Waterstones, which included “investment in their store estate and the empowerment of local bookselling teams.” The companies said each bookseller would operate independently but would benefit from the sharing of best practices.
Barnes & Noble’s reported sales growth of 1.1% for the holiday quarter ended Jan. 26 (in stores that had been open at least a year.) That was the company’s best quarterly sales growth in several years. It reported quarterly profit of $66.9 million, up from a loss of $63.5 million a year ago.
The company had lost more than $1 billion in market value in the past five years.
The deal is expected to close in the third quarter of 2019.
Barnes & Noble also announced a quarterly cash dividend of $0.15 per share, payable on August 2, 2019, to stockholders of record at the close of business on July 5, 2019.
Evercore is acting as financial adviser to the Barnes & Noble special committee of Barnes & Noble. Guggenheim Securities is financial adviser to the Barnes & Noble board. Credit Suisse Securities is financial adviser to Elliott.