Why Barnes & Noble, Inc Shares Jumped

Before you go, we thought you'd like these...
Before you go close icon

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Barnes & Noble, Inc  were looking smarter today, climbing as much as 14%, and finishing up 5% on a surprise buyout offer.

So what: This afternoon, private-equity firm G Asset Management offered to purchase 51% of the bookseller at a value of $22 a share, or just the Nook unit at a value of $5 a share, if the board is uninterested in selling the entire company. G Asset had originally offered to buy the Nook segment in November at a price valuing the company at $20 a share, though that was not made public at the time, and said today that it was extremely confident that separating the Nook unit would create value for shareholders.

Now what: Barnes & Noble shares peaked at $19.19 today and closed at $17.69, both well short of the $22 offer price, indicating that the market is skeptical that the deal will go through. G Asset is a little-known firm and said that its proposal was subject to raising the necessary financing and performing due diligence, among other factors. Barnes & Noble did not issue a response to G Asset; even if management is uninterested in selling, the offer should provide some solace to investors, showing that there is a potential buyer out there for the struggling bookstore chain. Barnes & Noble will report holiday-quarter results next Wednesday. Analysts are expecting a per-share profit of $0.61 on $2.03 billion in revenue, an 8.8% drop from a year ago. 

Learn from the master
Warren Buffett has made billions through his investing, and he wants you to be able to invest like him. Through the years, Buffett has offered up investing tips to shareholders of Berkshire Hathaway. Now you can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report.

The article Why Barnes & Noble, Inc Shares Jumped originally appeared on Fool.com.

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Barnes & Noble. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

People are Reading