Barnes & Noble reports $1B bid from Liberty Media

Barnes & Noble Inc., the nation's largest traditional book seller, said Thursday that Liberty Media Corp. has offered to buy it a deal valued at about $1 billion.

The bid of $17 a share in cash from the conglomerate chaired by billionaire media mogul John Malone sent Barnes & Noble's stock surging more than 24 percent in extended trading after the company announced the potential deal.

The offer values Barnes & Noble shares 21 percent higher than their Thursday closing price of $14.11.

The companies haven't yet signed an agreement, and the deal is still subject to closing conditions, including one that founding chairman Leonard Riggio keep a stake in the company and remain in a management position, Barnes & Noble said. The company said a committee of its board will evaluate the offer.

A spokeswoman for Liberty Media, which is based in Englewood, Colo., could not immediately be reached for comment.

Liberty Media operates three publicly traded companies - Liberty Interactive Inc., Liberty Starz Group and Liberty Capital Group - through which it runs home-shopping network QVC, movie channel operator Starz LLC and holds stakes in numerous other online, media and communications companies.

Barnes & Noble, which is based in New York, has 705 stores nationwide and 636 book stores run by its Barnes & Noble College Booksellers LLC subsidiary. The company investors know today has its roots in a single New York book store, the Student Book Exchange, which Riggio opened in 1965. By the 1970s, his business had grown to include seven college bookstores, and he bought the then-failing Barnes & Noble bookselling brand and its existing Barnes & Noble book store on Fifth Avenue.

The company put itself up for sale in August in response to pressure from billionaire activist shareholder Ron Burkle. That move came during a proxy battle Burkle waged against the company in opposition to a poison pill plan that limited any single investor to a 20 percent stake. The plan was ratified by shareholders in late 2010.

Traditional book sellers have been facing increasing competition from online retailers and discounters such as Amazon.com Inc. as consumers get increasingly comfortable shopping online and turn to the Web to find lower prices on books and, increasingly, to buy e-books they can read on an e-reader, smartphone or iPad.

The changing climate has already rocked much smaller Borders Group: The nation's second-largest book store chain, which is based in Ann Arbor, Mich., filed for bankruptcy court protection in February. It has since been carrying out plans to close more than a third of its 642 stores, and is reportedly in talks to sell more than half of the remaining stores. Barnes & Noble CEO William Lynch said in February that his company might be interested in purchasing a "minority" of those stores.

While Barnes & Noble has had better luck than Borders, its quarterly results have been weighed down recently by large investments in its online and e-reader businesses - markets both companies have turned to as ways to stem the steady decline in book sales in recent years. Barnes & Noble reported growth in its online store in the most recent quarter, and said both this and its bricks-and-mortar stores were helped by sales of its Nook e-reader. The Nook has gained fans but has not managed to match the buzz generated by Amazon's Kindle e-reader.

Barnes & Noble shares rose $3.39 to $17.50 after hours. They finished regular trading Thursday up 13 cents; they've traded between $8.45 and $20.45 the past year.