Waterstones owner adds Barnes & Noble to its bookshelf

Andrew Cummings
June 9, 2019

Elliott Advisors, which manages the company's United Kingdom holdings, acquired that country's leading bookseller, Waterstones, last June. That CEO is James Daunt, the British-born chief of Waterstones, who plans to head up both companies from New York City. He said that he planned to split his job between the United States and Britain, but would be spending a "substantial" amount of time in NY.

The one-time bookselling giant Barnes & Noble is being acquired by a hedge fund for $476 million.

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"We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years", Leonard Riggio, the founder of Barnes & Noble's modern iteration and still its chairman, said in a statement released Friday.

And he sees advantages for Barnes and Noble in the fight with Amazon, where the customer interaction is limited to buying things online.

Elliot's offer of $6.50 per share, represented a premium of about 42 per cent to Wednesday's close, the day before media reports of a potential transaction first surfaced.

But Barnes & Noble has suffered.

The company's Nook e-reader device was also a flop, never catching on in the way that Amazon's Kindle did.

In 2014, Barnes & Noble closed its New York Fifth Avenue store - once the world's largest bookstore - and has faced declining sales for at least the last three years.

He called the entire large-store model for any retail chain "a 20th century concept" extinguished by the internet.

"Our investment in Barnes & Noble, following our investment previous year in Waterstones, demonstrates our conviction that readers continue to value the experience of a great bookstore", said Paul Best, portfolio manager and head of European private equity at Elliott.

Parneros, however, rejected the accusations.

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