Ever since he has owned Barnes & Noble, Len Riggio has shown little interest in ceding control of the company he built into the country's largest bookstore chain, as evidenced by his bruising proxy fight with Ron Burkle last summer. But the $17 per share offer by Liberty Media to buy B&N may be too sweet an offer for Riggio and the B&N board to turn down.
For starters, Liberty Media's owner, John Malone, has adopted the opposite approach to Burkle's in trying to buy B&N. While Burkle charged that B&N's share price was undervalued due in part to poor management, Malone has praised the management team at B&N and made Riggio's continued participation in B&N, in both operational and financial terms, a condition of the deal.
Secondly, becoming part of a much larger organization would give B&N more financial resources to continue its digital transformation. Although B&N has had adequate cash resources to invest in digital to this point, the retailer did suspend its dividend earlier this year to help conserve cash for investment purposes. And while Riggio saw Burkle's efforts as nothing more than a grab for control of the company with no plan to help B&N grow, combining B&N with Liberty assets could provide B&N with new growth opportunities.
Although Malone has made no public comments about his interest in B&N, the early thinking is that Malone sees the Nook as a way to deliver content from Liberty Media's holdings, which range from the how-to book publisher Leisure Arts to Expedia. The proposed deal received the quick support of Penguin CEO David Shanks, who said authors, readers, and publishers all "have an interest in the financial security and prosperity of booksellers. The emergence of strong and committed owners, supported by experienced and successful management, will send a positive signal to the whole industry."