Barnes & Noble shares jumped as much as 16 percent Thursday afternoon after The Wall Street Journal reported an activist investor has proposed a deal to take the bookseller private. The stock was halted briefly on the news.
Sandell Asset Management came to the retailer with a transaction that would value Barnes & Noble at more than $650 million, or above $9 a share, people familiar with the plans told the Journal. Barnes & Noble shares closed Wednesday at $6.60 apiece.
Sources told the Journal that Barnes & Noble is still evaluating Sandell’s proposal. Sandell controls roughly 2 million Barnes & Noble shares, for a stake in the company of about 2.75 percent, a securities filing shows.
Representatives from Sandell and Barnes & Noble didn’t immediately respond to CNBC’s requests for comment.
Even with Thursday’s gains, shares of Barnes & Noble have tumbled more than 30 percent in 2017.
The bookseller faces heightened competition from the likes of Amazon Books, and other retailers moving their book assortments online. Heading into the key holiday season, Barnes & Noble aims to grow its same-store sales, something the company wasn’t able to do a year ago.
One person person reportedly standing in Sandell’s ways is Barnes & Noble Chairman Leonard Riggio, the Journal said.
Riggio doesn’t agree with the structure of the proposed deal, which calls for $500 million in debt financing, and $250 million from current Barnes & Noble shareholders, a source told the publication. The chairman still has a roughly 18 percent stake in Barnes & Noble, after purchasing the company in 1971.
This isn’t the first time Sandell has come after Barnes & Noble.
In July, the asset management firm issued a note calling Barnes & Noble’s real-estate assets “beachfront property” with untapped value.
“What makes the under-valuation of Barnes & Noble all the more shocking is that, as opposed to the numerous other national apparel, footwear, grocery, and home furnishing chains abounding in this country, there is but one truly national bookstore chain,” Sandell’s CEO, Thomas Sandell, said at the time.
Sandell called on Barnes & Noble to retain an investment bank to explore strategic alternatives, which aim at “achieving a privatization.”