Lost in the Barnes & Noble-Microsoft deal Monday morning was the news that the Anderson family, the controlling shareholders in Books-A-Million, have made a proposal to take the company private by acquiring all outstanding shares for $3.05 a share. The Anderson family, which includes chairman Clyde Anderson, directly or indirectly controls about 53% of BAM’s common stock. The offer, which puts the value of BAM at about $48.8 million, immediately drew the attention of at least four law firms who said they intend to investigate the bid to determine if the Anderson family breached its fiduciary duty by offering too low a price for the outstanding shares.
According to the proposal, the $3.05 cash offer represents a 20% premium over BAM’s closing price on April 27, and a 13% premium over the average closing price of the company’s common stock for the past 90 trading days. The deal would cost the Andersons about $23 million. In the proposal letter to the BAM board, Clyde Anderson noted that the offer comes after a year-long effort to enhance shareholder value through the sale or merger of BAM proved unsuccessful.
In the letter, Clyde Anderson stated he anticipates the acquisition would be in the form of a merger of BAM with a newly formed acquisition vehicle that the Anderson family would control. Anderson said that BAM will establish a special committee to examine the offer and noted that the Anderson family would not move forward with the deal without the support of the committee as well as the backing of the majority of non-Anderson shareholders. Anderson also added that the family has no interest in pursuing another attempt to find a third party to acquire the company or other strategic transactions. The letter also noted that if the special committee spends more than $2 million in legal and financial advisory fees, it may lower its offer.
If the deal goes through, the Anderson family expects BAM’s management to remain in place. Although BAM expanded late in 2011 with addition of former Borders outlets it is still struggling to carve a meaningful e-book business. In 2011 sales of e-books and accessories were about $14 million, about 3% of sales.