Barnes & Noble Inc. (BKS:US)’s founder and chairman, Leonard Riggio, told the bookstore chain he is interested in buying its consumer business and spinning out the unit that makes the Nook tablet, a person familiar with the matter said.
Riggio, who still owns (BKS:US) about 30 percent of the company’s stock, has told the board of his interest without starting a formal process yet, said the person, who asked not to be identified because the matter is private. Riggio has made a preliminary proposal and may make it more official this week, the person said.
Barnes & Noble posted a decline in holiday-season retail sales as the largest U.S. bookstore chain’s effort to take on Apple Inc. (AAPL:US)’s iPad with tablet-style Nooks fell short with shoppers. Riggio’s plan would keep the 689 consumer bookstores, which generated $996 million in sales (BKS:US) during the quarter ended in October, the person said. A collegiate unit, which had $773 million in sales during the quarter, and the Nook-making technology unit with $160 million in sales would be separated.
Mary Ellen Keating, a Barnes & Noble spokeswoman, declined to comment in an interview. Riggio’s plan was reported earlier by the Wall Street Journal.
The New York-based bookseller’s board (BKS:US) has formed a special committee to study a proposal if it is made, the person said, adding that Evercore Partners Inc. (EVR:US) is advising the panel on the matter. Riggio, 71, is working with boutique investment bank Peter J. Solomon Co., the person said.
Diane Coffey, a spokeswoman for Peter J. Solomon, declined to comment. A spokesman for Evercore also declined to comment.
Barnes & Noble is scheduled to report fiscal third-quarter earnings (BKS:US)on Feb. 28. The company’s shares (BKS:US) have lost more than half their value in five years, closing at $13.51 on Feb. 22. The Standard & Poor’s 500 Stock index gained 12 percent in the same period.
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