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About those "B&N Selling Itself Rumors"

A rumor went around yesterday that B&N is working with an investment banker to find a buyer for the ailing retailer.

The rumor has already been denied by B&N, and according to Benzinga:

In a messy game of telephone, Street Insider said that Bloomberg said that Dealreporter said that Barnes & Noble, Inc. BKS denied reports it was involved in talks to sell.

Dealreporter sources allegedly said Barnes & Noble had been working with financial adviser Guggenheim Securities for six months as it interacted with multiple potential buyers, including Apollo Global Management APO and Platinum Equity.

However, a Barnes & Noble spokesperson told Benzinga the company is not presently engaged in a sales process.

Closer Look

Small inaccuracies in the story merit further suspicion of the rumor’s veracity.

For one, Barnes & Noble’s relationship with Guggenheim is not new; it has worked with the investment banker since at least 2013. Additionally, despite Debtwire reports that the company is looking to sell its real estate, a recent 10-K filing confirmed that Barnes & Noble leases rather than owns all but one of its stores.

Okay, so B&N has already denied the rumor, so the odds are good that it is at least mostly false.

The reason I am qualifying that conclusion is that the original source for the story, DealReporter, was also the first to report in 2014 that B&N was going to spin off Nook Media. They reported it as a rumor two months before the official announcement.

So there could be a story here.

Is B&N trying to sell itself? Probably not; the first thing potential buyers would ask is whether B&N has a plan to survive Amazon, and Barnes & Noble doesn’t have an answer. (It’s not just that they can’t articulate a response; they actually do not know how they are going to survive.)

So even if B&N were going to sell itself, no one in their right mind would want to buy them.

Still, I think there could be a story here.

The only question is, what is the real story?

image by Angel Xavier Viera

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Nirmala September 1, 2017 um 11:31 am

The only company that might be able to do something with B&N after buying it would be…..Amazon! If they wanted to scale up their brick and mortar operations very quickly, they could do that by taking over the existing B&N stores.

Nate Hoffelder September 2, 2017 um 11:03 am

It would be a poison pill for Amazon. Too many at B&N would hat it, and quietly sabotage the business.

I wonder if regulators would allow it?

BDR September 1, 2017 um 2:59 pm

There’ve been these rumors before. No doubt BKS *would* like to sell itself. The problem is a buyer. AMZN? Uh, no. First, AMZN needs B&N’s retail book sales like they need a hole in the head. The real estate MIGHT be useful for AMZN distribution but abandoned malls are everywhere. Third, of course, are antitrust problems. If Donald sees a way to make AMZN’s life miserable, he’ll no doubt do it and this acquisition would be just too juicy for Trump to ignore. Were this to happen, expect Jefferson Beauregard to crack down on this like white on rice. Fourth, of course, is the obvious: If AMZN *wanted* BKS, they would’ve already *had* BKS; back when BKS first lifted its skirt with a come-hither look a coupla years ago … BEFORE Trump became a thing. They didn’t and they probably won’t in the future.

There ARE some alternatives. Maybe. Indigo from Canada is a (very) profitable bookseller (yep, it evidently *can* be done) who has been making noises about entering the US market and this might be a pretty good fit for them.

Personally, I’m expecting BKS to (continue to) go unloved and for its death spiral to continue.

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