All-cash acquisition of $6.50 per share
delivers a significant premium for all shareholders
Transaction concludes Barnes & Noble
strategic alternative review
Elliott to pursue growth strategy at Barnes
& Noble, empowering local stores across the US, while
benefitting from international scale
Barnes & Noble, Inc. (NYSE:BKS, “Barnes & Noble”)
announces today that it has entered into a definitive agreement to
be acquired by funds advised by Elliott Advisors (UK) Limited
(“Elliott”) for $6.50 per share in an all-cash transaction valued
at approximately $683 million, including the assumption of
debt.
Elliott’s acquisition of Barnes & Noble, the largest retail
bookseller in the United States, follows its June 2018 acquisition
of Waterstones, the largest retail bookseller in the United
Kingdom. James Daunt, CEO of Waterstones, will assume also the role
of CEO of Barnes & Noble following the completion of the
transaction and will be based in New York.
The $6.50 per share purchase price represents a 43% premium to
the 10-day volume weighted average closing share price of Barnes
& Noble’s common stock ended June 5, 2019, the day before
rumors of a potential transaction were reported in the media.
The announced transaction with Elliott is the culmination of an
extensive Strategic Alternative Review conducted by the Special
Committee of the Barnes & Noble Board of Directors, which was
announced on October 3, 2018. The Board of Directors of Barnes
& Noble unanimously approved the transaction and recommend the
transaction to Barnes & Noble shareholders. Leonard Riggio, the
Founder and Chairman of Barnes & Noble, has also entered into a
voting agreement in support of the transaction.
Barnes & Noble serves 627 different communities across all
50 states, where it remains the #1 bookseller in the United States.
Elliott seeks to build upon this strong foundation as it addresses
the significant challenges facing the bricks and mortar book retail
space, applying a model that successfully turned around Waterstones
over the past decade.
Following the close of the transaction, Elliott will own both
Barnes & Noble and Waterstones, and while each bookseller will
operate independently, they will share a common CEO and benefit
from the sharing of best practice between the companies.
Waterstones has successfully restored itself to sales growth and
sustainable profitability, based on a strategy of investment in
their store estate and the empowerment of local bookselling teams.
Under Daunt’s leadership and Elliott’s stewardship, this commitment
to bookselling excellence will strengthen the ability of both
companies to navigate with success a rapidly changing retail
landscape.
With respect to today’s announcement, Leonard Riggio, Founder
and Chairman of Barnes & Noble, stated, “We are pleased to have
reached this agreement with Elliott, the owner of Waterstones, a
bookseller I have admired over the years. In view of the success
they have had in the bookselling marketplace, I believe they are
uniquely suited to improve and grow our company for many years
ahead. I am also confident that James Daunt has the leadership
ability and experience necessary to lead this great organization. I
will do everything I can to help him make the transition smooth.
Having been the leader of Barnes & Noble for 54 years, I have
had the privilege of working with the very best people in all the
world of bookselling, including our great store managers and
booksellers, who work in our stores. It is they who have made
Barnes & Noble the #1 most reputable retailer in America. My
profound thanks, as well, to the entire publishing world, with whom
we have shared a great relationship over the years, and the many
suppliers who have provided vital services. Finally, to our tens of
millions of wonderful customers and Members, it has been a
privilege to serve them.”
In anticipation of his new CEO role at Barnes & Noble, James
Daunt added, “I look forward greatly to working with the
booksellers at Barnes & Noble. Physical bookstores the world
over face fearsome challenges from online and digital. We meet
these with investment and with all the more confidence for being
able to draw on the unrivalled bookselling skills of these two
great companies. As a place in which to choose a book, and for the
sheer pleasure of visiting, we know that a good bookstore has no
equal. I thank Mr. Riggio for his confidence, and I am grateful to
Elliott for their commitment to support the continued
transformation at Waterstones, and now also the same at Barnes
& Noble.”
Paul Best, Portfolio Manager and Head of European Private Equity
at Elliott, added, “Our investment in Barnes & Noble, following
our investment last year in Waterstones, demonstrates our
conviction that readers continue to value the experience of a great
bookstore. We would like to acknowledge the contributions of
Founder and Chairman Leonard Riggio and his team for creating the
leading bookstore company in the United States. We look forward to
working with James Daunt and the Barnes & Noble community of
readers, members and booksellers as they start an exciting new
chapter.”
The transaction is subject to customary closing conditions,
including the receipt of regulatory and stockholder approval, and
is expected to close in the third quarter of 2019. The merger
agreement provides for the acquisition to be consummated through a
merger structure. However, the parties expect to amend the
agreement to utilize a tender offer structure, which is expected to
reduce the time to closing by a number of weeks.
Dividend
Barnes & Noble also announced that it has declared 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.
Fiscal 2019 Year-End Earnings Announcement
Barnes & Noble separately announced that it will be
reporting its fiscal 2019 fourth quarter and year-end financial
results on June 19, 2019.
Advisors
Evercore is acting as financial advisor and Baker Botts L.L.P.
is acting as legal advisor to the Special Committee of Barnes &
Noble and Guggenheim Securities LLC is acting as financial advisor
and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as
legal advisor to the Board of Directors of Barnes & Noble.
Credit Suisse Securities L.L.C. is acting as financial advisor and
Debevoise & Plimpton LLP is acting as legal advisor to
Elliott.
About Elliott
Elliott Management Corporation manages two multi-strategy funds
which combined have approximately $34 billion of assets under
management. Its flagship fund, Elliott Associates, L.P., was
founded in 1977, making it one of the oldest funds of its kind
under continuous management. The Elliott funds’ investors include
pension plans, sovereign wealth funds, endowments, foundations,
funds-of-funds, and employees of the firm. Elliott Advisors
(UK) Limited is an affiliate of Elliott Management
Corporation.
About Barnes & Noble, Inc.
Barnes & Noble, Inc. (NYSE:BKS) is the nation’s largest
retail bookseller, and a leading retailer of content, digital media
and educational products. The Company operates 627 Barnes &
Noble bookstores in 50 states, and one of the Web’s premier
e-commerce sites, BN.com (www.bn.com). The Nook Digital business
offers a line-up of popular NOOK® tablets and eReaders and an
expansive collection of digital reading and entertainment content
through the NOOK Store®. The NOOK Store (www.nook.com) features
digital books, periodicals and comics, and offers the ability to
enjoy content across a wide array of popular devices through Free
NOOK Reading Apps™ available for Android™, iOS® and Windows®.
General information on Barnes & Noble, Inc. can be obtained by
visiting the Company's corporate website at
www.barnesandnobleinc.com.
About Waterstones
Waterstones is the UK and Ireland’s leading high street
bookseller with 293 bookshops, including Foyles, Hatchards, Hodges
Figgis and branches in Ireland, Brussels and Amsterdam. It is the
only national specialist book retailer of scale in the UK, and
operates also through the e-commerce site, Waterstones.com.
Caution Regarding Forward-Looking Statements
This communication contains certain forward-looking statements
(within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended) that are based on the beliefs of the Company’s
management, as well as assumptions made by, and information
currently available to, the Company’s management. When used in this
communication, the words “anticipate,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “will,” “forecasts,” “projections,” or
other words or phrases of similar import or future or conditional
verbs such as will, may, might, should, would, could, or similar
variations, identify forward-looking statements. These include
statements relating to the financial and operational impact of the
proposed transaction, the benefits of the proposed transaction, the
expected timing of completion of the proposed transaction, as well
as other statements that are not historical facts. These statements
reflect only the Company’s current expectations and are not
guarantees of future performance or results. Forward-looking
information involves risks, uncertainties and other factors that
could cause actual results to differ materially from those
expressed or implied in, or reasonably inferred from, such
statements. These factors include, among others, the timing,
receipt and terms and conditions of any required governmental and
regulatory approvals of the proposed transaction; the occurrence of
any event, change or other circumstances that could give rise to
the termination of the Merger Agreement; the inability to complete
the proposed transaction in a timely manner or at all; the
possibility that stockholders may not adopt the Merger Agreement;
risks regarding the failure of Parent to obtain the necessary
financing to complete the Merger; the risk of any unexpected costs
or expenses resulting from the proposed transaction, the risk of
any litigation relating to the proposed transaction, the risk that
the proposed transaction and its announcement could have an adverse
effect on the Company’s ability to retain customers and retain and
hire key personnel and maintain relationships with its suppliers,
customers and other business relationships; risks related to
disruption of management’s attention from the Company’s ongoing
business operations due to the transaction; the effect of the
announcement of the proposed transaction on the Company’s stock,
operating results and business generally; and the risk of
stockholder litigation in connection with the proposed transaction.
All such factors are difficult to predict and are beyond the
Company’s control. Additional factors that could cause results to
differ materially from those described above can be found in the
Company’s most recent Annual Report on Form 10-K, as it may be
updated from time to time by quarterly reports on Form 10-Q and
current reports on Form 8-K all of which are available on the
Company’s website at
http://investors.barnesandnobleinc.com/sec-filings and on the SEC’s
website at http://www.sec.gov. Therefore, caution should be taken
not to place undue reliance on any such forward-looking statements.
These forward-looking statements speak only as of the date of this
communication, and the Company expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
its expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is
based.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy our securities or the solicitation
of any vote or approval. The proposed Merger of the Company will be
submitted to the Company’s stockholders for their consideration. In
connection with the proposed transaction, the Company intends to
file a proxy statement and other relevant materials with the SEC in
connection with the solicitation of proxies in connection with the
proposed transaction. The definitive proxy statement will be mailed
to the Company’s stockholders. BEFORE MAKING ANY VOTING OR
INVESTMENT DECISION WITH RESPECT TO THE PROPOSED TRANSACTION,
INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION
(INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND OTHER
RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. The proxy statement, any amendments or
supplements thereto and other relevant materials, and any other
documents filed by the Company with the SEC, may be obtained once
such documents are filed with the SEC free of charge at the SEC’s
website at www.sec.gov. Copies of the filings together with the
materials incorporated by reference therein will also be available,
without charge, on the Company’s corporate website at
www.barnesandnobleinc.com under “Investor Relations” - “SEC
Filings.”
The Merger Agreement may be amended in order to effect the
acquisition of the Company through a tender offer, though no tender
offer for the outstanding shares of the Company has commenced. This
communication is for informational purposes only and is neither a
recommendation, an offer to purchase nor a solicitation of an offer
to sell shares. It is not a substitute for the tender offer
materials that the offeror would file with the SEC upon
commencement of the tender offer, if the parties amend the Merger
Agreement in order to effect the acquisition of the Company through
a tender offer. At the time the tender offer is commenced, if the
parties so amend the Merger Agreement, the offeror will file tender
offer materials on Schedule TO, and the Company thereafter will
file a Solicitation/Recommendation Statement on Schedule 14D-9 with
the SEC with respect to the tender offer. IF THE MERGER AGREEMENT
IS SO AMENDED, THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO
PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER
OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL
CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF COMMON STOCK OF
THE COMPANY ARE URGED TO READ ANY SUCH DOCUMENTS CAREFULLY IN THEIR
ENTIRETY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME,
AS WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION THAT HOLDERS OF SHARES OF COMMON STOCK OF THE COMPANY
SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING
THEIR SHARES. If the Merger Agreement is amended to contemplate a
tender offer as described above, the Offer to Purchase, the related
Letter of Transmittal and certain other tender offer documents, as
well as the Solicitation/Recommendation Statement, will be made
available to all holders of shares of common stock of the Company
at no expense to them. The tender offer materials, the
Solicitation/Recommendation Statement and other related documents
(when available) would be made available for free at the SEC’s
website at www.sec.gov or by directing a request to the Information
Agent for the tender offer who would be named by the offeror in the
tender offer materials.
Participants in the Solicitation
The Company, directors, executive officers, other members of
management and employees of the Company may, under the rules of the
SEC, be deemed to be “participants” in the solicitation of proxies
from the Company’s stockholders in connection with the proposed
transaction. Information regarding the persons who may be
considered “participants” in the solicitation of proxies will be
set forth in the Company’s preliminary and definitive proxy
statements when filed with the SEC and other relevant documents to
be filed with the SEC in connection with the proposed transaction,
each of which can be obtained free of charge from the sources
indicated above when they become available. Information regarding
certain of these persons and their beneficial ownership of the
Company’s common stock is also set forth in the Company’s
definitive proxy statement for the Company’s 2018 annual meeting of
stockholders, which was filed with the SEC on August 24, 2018.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190607005201/en/
Barnes & Noble
MediaMary Ellen KeatingSenior Vice PresidentCorporate
CommunicationsBarnes & Noble, Inc.+1 (212)
633-3323mkeating@bn.com
InvestorsAndy MilevojVice PresidentCorporate Finance and
Investor RelationsBarnes & Noble, Inc.+1 (212)
633-3489amilevoj@bn.com
Elliott
LondonSarah Rajani CFAElliott Advisors (UK) Limited+44 (0) 20
3009 1475srajani@elliottadvisors.co.uk
New YorkStephen SpruiellElliott Management Corporation+1 (212)
478 2017sspruiell@elliottmgmt.com
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