Barnes & Noble’s new chapter: Its sale to hedge fund Elliott Management

June 7, 2019

Barnes & Noble, the one-time bookselling giant that lost customers to Amazon.com and other online rivals, is being acquired by hedge fund Elliott Management for $476 million.

Elliott, the owner of U.K. book chain Waterstones, said it plans to invest in Barnes & Noble.

The national chain that many blamed for the demise of independent bookstores has been ravaged by Amazon.com and other online sellers. In March, it warned of lower-than-expected profits, sending its stock plunging to below the price of a paperback book.

The purchase by the hedge fund comes after Barnes & Noble in October said that it might put itself up for sale after it was approached by a number of potential buyers. Those possible buyers including founder Leonard Riggio who opened Barnes & Noble stores across the country and turned it into a superstore.

Elliott Management said it plans to invest in Barnes & Noble, adding that Waterstones CEO James Daunt will also become the CEO of Barnes & Noble. In a statement, the companies said Waterstones had returned to “sustainable profitability” and sales growth.

“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,” Daunt said in the statement.

Barnes & Noble said Elliott Management will pay $6.50 per share, an approximately 9% percent premium to the company’s Thursday closing stock price. Elliott bought the U.K. bookseller Waterstones in June 2018.

The sale, valued at about $683 million including debt, is targeted to close in the third quarter if approved by regulators and shareholders.

Shares of the New York company jumped 11% in early trading.