Wunderlich Securities Provided Color on Liberty Capital Group, Buy and $95 PT

Wunderlich Securities provided color on Liberty Capital Group LCAPA, after the Group indicated its interest in acquiring Barnes and Nobles BKS. In a research report published today, Wunderlich described the Group's interest in Barnes and Noble. In the report, Wunderlich states, "After last Thursday's close, Liberty indicated its interest in acquiring 70% of BKS ($500mm likely cash component) with total equity valued at $1.02B. The offer is subject to the continued involvement of current Barnes & Noble Chairman Leonard Riggio in management and maintaining his 30% equity interest. The process has been ongoing since last August with Liberty Capital having the only offer but talks not exclusive. A further wrinkle is the involvement of Ron Burkle's Yucaipa with nearly 20% of shares." Wunderlich also tried to provide a possible way of reasoning for the Group. The report states, "Liberty is facile in thinking strategically as well as financially, which we feel differentiates it from PE firms. (QVC is certainly both a retailer and a media company.) The issue with Nook that LCAPA is likely weighing is whether subsuming readers into the tablet category will neuter BKS's advantages as a bookseller and definitively shift the long-term market to tech leaders such as Apple and Samsung, and online retailing leader Amazon." On Friday, Liberty Capital Group lost 2.06% to close the week at $87.50.