B&N Spins Off GameStop

by Staff -- Publishers Weekly, 10/11/2004

Barnes & Noble has sold a chunk of its interest in GameStop and plans to complete its spinoff of the videogame company by next month.

GameStop Corp. has purchased 6.1 million shares of B&N's stock in GameStop for $111.5 million, including $37.5 million in cash and another $74 million to be paid over the next three years. The sale reduces B&N's stake in GameStop from 64% to 59%. B&N plans to distribute its remaining 29.9 million shares in GameStop to B&N stockholders on November 12. Analysts had been calling for B&N to divest itself of GameStop, saying the inclusion of the videogame company made it difficult to get a firm gauge on B&N's core bookselling business.

B&N chairman Leonard Riggio said B&N's $400-million investment in GameStop has turned out to be worth more than $850 million, of which about $360 million has been returned as cash to B&N and over $500 million will be distributed to shareholders through the spinoff.