New York City Barnes & Noble said it is exploring strategic alternatives, including putting itself up for sale. The nation’s largest bookseller said that its board believed the stock was “significantly undervalued” and that it had set up a special committee to review its options.
“Barnes & Noble has an iconic brand and unique competitive advantages we believe will position the company to succeed over time in a rapidly changing market,” the board said in a statement. “The board is confident in Barnes & Noble’s strategy and fully supportive of the senior management team, which is delivering explosive growth in our fast-developing digital business.”
The announcement came as Barnes & Noble faces a lawsuit from an activist shareholder, Ron Burkle, about the company's "poison pill" plan. Burkle, who owns 18% of the stock, argues the "poison pill" plan creates an unfair playing field that favors chairman and company founder Leonard Riggio, who has a 30% stake in the company, and other Riggio family members. Burkle has said he is not interested in a takeover but wants to see changes in the company's corporate governance.
The chain said Riggio has informed the board that he intends to consider the possibility of participating in an investor group to acquire the company.
“I fully support the board’s decision to evaluate strategic alternatives at this time. Regardless of whether I participate in an investment group that buys the company, I, as well as the entire senior management team, am willing and eager to remain with the company and see it through the challenging years ahead,” Riggio said in a statement.
Although Barnes & Noble has shifted its focus to the fast-growing, electronic book business, debuting its own e-book reader last year and expanding its e-book online bookstore, its core book selling-business remains pressured by online competitors and discounters.