Barnes & Noble Surges as It Explores a Sale

Barnes & Noble Inc.  (BKS) shares surged more than 24% to $6.70 on Thursday, Oct. 4, after the company said it was exploring a sale. 

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The stock rose more than 24% after markets closed on Wednesday after the news was released. Barnes & Noble has been a battered stock, falling almost 21% this year, as years of dominance by Amazon.com Inc.  (AMZN)  has made Barnes & Noble's brick-and-mortar business model almost obsolete. 

The embattled book retailer said it's forming a special committee to weigh "expressions of interest from multiple parties in making an offer to acquire the company." One of the top bidders, at least in the early going, is Executive Chairman Leonard Riggio, who currently owns 19.2% of the company. "The board of directors has appointed a special committee of independent directors ... to lead the strategic review process," Barnes & Noble said in a statement.

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Barnes & Noble alsio said it was adopting a poison pill in order to fend off potential hostile takeover bids. With the poison pill, shareholders would hold the right to buy preferred stock at a 50% discount in the event that any buyer acquires a 20% stake in the company and makes an unwarranted tender offer for more equity. 

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