Shares of Barnes & Noble (NYSE:BKS) climbed 11% on Friday after the company said it would be taken private by Elliott Advisors for $6.50 per share in cash, or $683 million including debt. The jump comes a day after shares traded up 22.7% on rumors it was nearing a deal.
The deal offers a 43% premium to Barnes & Noble's 10-day volume-weighted average close prior to the reports surfacing.
The deal would close the book on Barnes & Noble's long -- and of late, troubled -- run as a public company. It remains profitable but has found it difficult to grow in an age of online commerce.
Barnes & Noble in October announced a formal review of strategic alternatives, with most of the attention at the time focused on a potential bid by chairman Leonard Riggio. Elliott, run by billionaire Paul Singer, is an interesting buyer because the firm already owns U.K. book retailer Waterstones.
Waterstones CEO James Daunt will be CEO of the U.S. company as well. While the two chains will operate independently of each other, they will share strategies and best practices.
The deal does include a $30 million breakup fee, providing Riggio or some other suitor an avenue to step in and try to top the offer. But the most likely outcome for investors is that the deal will close as planned for $6.50 in cash.
How you feel about that outcome likely depends on how long you have held the stock. The price is, as stated, a nice premium over recent trading prices, and near a 52-week high. But it is just half of where the stock traded less than three years ago.