Liberty Media Offers $1 Billion to Acquire Barnes & Noble

Liberty Media Corporation LCAPA announced Wednesday that it has made a proposal to acquire Barnes & Noble Inc. BKS for $17 per share in cash. Liberty's offer is a 20% premium to the Thursday closing price of Barnes & Noble, at tops $1 billion. Barnes & Noble put itself up for sale last summer. According to the press release, "Liberty's equity ownership, which would be attributed to the Liberty Capital group, is expected to be approximately 70% of Barnes & Noble. Liberty expects that its cash contribution toward the purchase price, depending on the amount of financing that can be obtained, will be in the range of $500 million." Liberty Media Corporation is a holding company, and through its subsidiaries, is engaged in the video and online commerce, media, communications and entertainment industries. It holds a market capitalization of $7.2 billion. David Gelles of the Financial Times notes that "John Malone, the billionaire chairman of Liberty, is known to be an astute deal hunter. His most recent success was Liberty's purchase of 40 per cent of satellite radio provider Sirius XM for $530m, a stake he bought when the company was near bankruptcy and which is now worth several billion dollars." As previously announced, Liberty plans to split-off the businesses, assets and liabilities currently attributed to the Liberty Capital and Liberty Starz tracking stock groups. Barnes & Noble has not been immune from the financial difficulties of the retail book industry. Especially in light of Amazon.com AMZN and tablets, publishing and distribution companies have had to adjust business models. Still, Barnes & Noble has made efforts to compete. The Nook, an e-reader offering, has been popular with some consumers. It has yet to find the traction of Amazon's Kindle, however.