Elliott Management’s offer
In Elliott Management to Acquire Barnes Noble, Stock Rises, we highlighted that on June 7, Elliott Management announced its plans to acquire Barnes & Noble (BKS) for ~$683 million including debt. The acquisition price of $6.5 per share implies a 43% premium over Barnes & Noble’s stock price on June 5.
On June 6, rumors of a potential deal began making the rounds, and the stock is up 48.1% as of June 10.
Readerlink is working toward a higher offer
Now, however, there’s a twist. On June 10, the Wall Street Journal reported that Readerlink, another book distributor, was working toward making a bid for Barnes & Noble that would top Elliott’s offer. According to the report, there’s a provision in the merger agreement between Elliott Management and BKS specifying that if BKS strikes a deal with another party before 11:59 PM EDT on June 13, it will have to pay Elliott up to $4 million. The breakup fee after that date would be $17.5 million. Therefore, if Readerlink can arrange financing, it might consider making the bid before June 13. BKS stock was up 3.7% on June 10.
Elliott’s deal for BKS
If, however, the deal between Elliott and BKS goes through, Elliott will take Barnes & Noble private. BKS and Waterstones, which Elliott acquired last year, will run independently but will be headed by the same CEO, James Daunt.