What's Going On With Barnes And Noble Education Stock Wednesday?

Barnes & Noble Education BNED shares are moving higher Wednesday. The stock appears to be trading on continued volatility surrounding a possible strategic transaction with the company.

What Happened: Activist investors Outerbridge and Greenhaven submitted a preliminary recapitalization proposition of $114.5 million to the board of Barnes and Noble at the start of the month.

The proposal featured a $57 million rights offering, guaranteed by Outerbridge, Greenhaven and others, alongside a separate $57 million direct investment from eight investors at a price of 35 cents per share.

Additionally, Greenhaven and Outerbridge would be provided with a “PIPE Capacity Option,” granting them the authority to invest up to $20 million and $7.5 million, respectively.

Provisions outlined in the proposal included a 10% backstop fee payable in shares, the assignment of board seats for Greenhaven representatives and the formation of an executive committee aimed at facilitating a transition to a new CEO.

Following its deliberation on May 2, the board acknowledged that the proposal held promise for a potentially superior transaction, but refrained from officially designating it as such. Outerbridge then communicated on May 6 its decision not to pursue further discussions regarding the transaction.

Although Outerbridge has stopped discussing the matter, Greenhaven said last week that it will continue to explore a possible transaction and may have discussions with management and board members.

Barnes and Noble’s average session volume is approximately 6.7 million, according to data from Benzinga Pro. Barnes and Noble was seeing abnormally high volume of 189 million as of Wednesday morning.

Related Link: A Closer Look at 8 Analyst Recommendations For Macy’s

BNED Price Action: Barnes and Nobles stock was halted multiple times due to volatility Wednesday morning. At the time of publication, Barnes and Nobles shares were up 74.6% higher at 94 cents, per Benzinga Pro.

Image: Cambridge Finance from Pixabay