Bookstore behemoth Barnes & Noble Inc., facing tough competition from online retailers and a free-falling stock, said Tuesday that it was considering selling itself.
The New York company said it was putting together a special committee to "evaluate strategic alternatives" to boost its "significantly undervalued" shares.
Shares surged 26% in after-market trading to $16.17 after closing down 98 cents, or 7.1%, at $12.84. The stock has nose-dived since April, when the price was hovering around $25.
The bookseller's vulnerability has already captured the attention of Los Angeles billionaire and ********* hobnobber Ron Burkle, a major stakeholder who has been making moves to increase his roughly 19% stake in the company.
The former supermarket magnate has slammed the bookseller's current management while aggressively buying up shares.
His investment firm Yucaipa Cos. sued Barnes & Noble in May in an attempt to dismantle the company's poison-pill policy, which tries to prevent hostile takeovers by banning investors from hoarding more than 20% of its shares without approval from the board. Barnes & Noble Chairman Leonard Riggio, who holds about a 30% stake, testified last month in a Delaware trial that he and his advisors had discussed how to thwart Burkle's tactics.
The special committee to review a possible sale will consist of four independent directors who will consider various options before making a recommendation, the company said. It did not provide a set timeline.
In making the announcement, the company also said that Riggio was thinking of joining an investor group to buy the book retailer.
