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) --

Barnes & Noble

(BKS) - Get Barnes & Noble, Inc. Report

received a $1 billion bid from

Liberty Media

, but what would the media company do with the book selling giant?

With billionaire John Malone at the helm, Liberty Media has made a name for itself in recent years by purchasing stakes in underappreciated companies and spinning them off.

Most notably, Liberty Media purchased

Sirius XM Radio

(SIRI) - Get Sirius XM Holdings, Inc. Report

in 2009 for $530 million in exchange for stock and board seats, effectively saving the satellite radio company from bankruptcy. Liberty's 40% stake in Sirius is now worth $3.5 billion.

Malone, it would seem, will be looking for similar returns with Barnes & Noble.

"Barnes & Noble is the established leader in bookselling and is at the forefront of the transition to digital, with a management team that has demonstrated expertise in operations and positioned the company for growth in a dynamic marketplace," Liberty said in a statement.

>Barnes & Noble Bid: Can Beggars Be Choosers?

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"John Malone sees Barnes & Noble emerging as the only bookseller," turnaround specialist Jim McTevia says. "No one is going to jump on Borders. In my opinion I see Borders liquidating."

As part of the deal, which is worth $17 a share, Liberty Capital would receive equity ownership of about 70% of Barnes & Noble. Liberty expects its cash contribution to be around $500 million "depending on the amount of financing that can be obtained."

Barnes & Noble is reviewing the offer, which some

analysts insist is too low

. The company said the proposal is contingent on the participation of its chairman, Leonard Riggio,"both in terms of his continuing equity ownership and his continuing role in management."

Liberty Media runs three publicly traded companies --

Liberty Interactive



Liberty Starz

( LSTZA)and

Liberty Capital

( LCAPA) -- which run home shopping network QVC and Starz movie channel. Liberty Interactive owns the Atlanta Braves, as well as a stake in




So where does Barnes & Noble fit?

"Anything that makes money fits in Malon's Liberty portfolio," McTevia says.

Much needed cash from Liberty will buy Barnes & Noble time and allow Riggio to restructure and reorganize the company, according to McTevia. "He is not a vulture. He isn't going to take advantage of a bad situation."

One possible place for the book-seller would be with Liberty Capital's portfolio of stakes in e-commerce sites like

(EXPE) - Get Expedia Group, Inc. Report


, among others.

With the infusion of money, Liberty Media can help Barnes & Noble shutter brick-and-mortar stores at a more rapid pace, or it can transform those stores into physical locations for some of its vast online presence.

With the help of Malone, Barnes & Noble could also become a serious contender in the digital space.

"As a public company covered by retail analysts, Barnes & Noble may not have the leeway or resources to keep up the technology battle and deliver rising EBITDA," Credit Suisse analyst Gary Balter wrote in a note. "Yet, as a division of a much larger company, Barnes & Noble can afford to fight the good fight, and based on its success to date, win."

Liberty Media can also offer Barnes & Noble another distribution channel with QVC.

Aside from the strategic possibilities, there's always the chance Malone is looking at Barnes & Noble as a tax write-off, Wall Street Strategies analyst Brian Sozzi says, and use Barnes & Noble's losses to bring down his own tax bill.

--Written by Jeanine Poggi in New York.

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