Sandell Asset Management Corp, which describes itself as a “private, alternative asset management firm,” sent a letter to Barnes & Noble’s board of directors this morning urging that the company try to sell itself.
In the letter, Sandell asked that B&N hire an investment banking firm to review its strategic options, which it said included selling out to a private equity firm or looking to do a deal with an Internet or media company. “It has become clear to us that all of the Company’s stakeholders would be better served if Barnes & Noble were operated as a private company or as a division within a larger company,” Sandell wrote.
The firm said it believes B&N’s share price, which was $7.10 Monday, down 36% from the beginning of the year, is undervalued in part because investors have overreacted to the problems faced by brick-and-mortar stores. “Physical books, and physical bookstores, are not going away anytime soon,” Sandell said.
In sending the letter, Sandell said it has accumulated a “meaningful” stake in B&N whose largest shareholder remains company founder and chairman Len Riggio. The Wall Street Journal first reported late Monday night that Sandell was preparing to ask that B&N consider putting itself on the block.
Commenting on the letter, B&N spokesperson Mary Ellen Keating said: “Neither Mr. Sandell nor anyone from his hedge fund has reached out to us yet, but, we welcome constructive dialogue with all of our shareholders.”
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SOURCE: Publishers Weekly