John Malone wants the world's largest bookstore


That’s the moniker that Barnes & Noble has claimed for decades, but it’s doubtful that Liberty Media is focused on brick and mortar buildings with its offer of a bit over $1 billion to acquire Barnes & Noble. But the surprise bid on Friday (5/20) has critics on both sides.

Some observers immediately questioned why John Malone’s company, or anyone else, would pay $17 per share for a company that’s been on the skids and until now had found little interest in its effort to find a buyer. But some analysts who see B&N as a dominant player in the electronic book market are saying Liberty’s offer – despite being a big premium over the recent trading price – undervalues the book retailer.

The proposal would have Liberty acquire a 70% stake in B&N, with founder Leonard Riggio remaining as an equity investor and his management team staying in place. Liberty said its cash contribution, depending on how much financing can be obtained, will be in the range of a half billion dollars.

B&N hasn’t said yes to the deal yet, but announced that it will study the offer.

RBR-TVBR observation: Is Malone crazy? Not necessarily. Barnes & Noble already sells a lot besides books online, including music, movies and electronics. We could see Malone building it into a full-fledged competitor to Amazon across a much wider range of products by teaming with all sorts of product retailers. Amazon currently has a value of more than $46 billion, so buying B&N for $1 billion would look cheap if Malone can pull off such a remaking of an established brand.