Editor’s note: This story was originally published on October 3, 2018.
Barnes & Noble shares rose more than 20% after the board said it would consider a sale of the troubled company.
The commission said it had appointed a special committee on Wednesday to look into the bids. One came from longtime Barnes & Noble president Len Riggio. He is the company’s largest shareholder, controlling close to 20%.
Barnes & Noble ( BKS ) also reported that a shareholder it could not identify had quickly built a stake in the company. To block a hostile takeover, Barnes & Noble’s board of directors approved a so-called poison pill.
The poison pill will kick in if the unidentified party accumulates 20% or more of the shares. At that time, shareholders will be allowed to buy Barnes & Noble shares at a 50% discount, diluting the stock’s value.
The announcement comes shortly after another investor disclosed a stake of around 7% and said it had held talks with Riggio to buy the company.
The board said Riggio would vote his shares in favor of any transaction recommended by the board.
A potential sale is just the latest twist in the saga of Barnes & Noble, which is looking to replace its fifth CEO in as many years.
The bookstore fired its last CEO, Demos Parneros, in early July, citing unspecified violations of company policy. Barnes & Noble later revealed that sexual harassment and harassment claims led to Parneros’ termination.
In August, Parneros sued his former employer in federal court for defamation and wrongful termination.
Barnes & Noble still has 600 more stores and 23,000 employees. Last quarter, same-store sales fell 6.1% compared to a year ago.
Sales at Barnes & Noble have declined over the past four years. New tactics, such as smaller store formats and the kitchen concept, have struggled to win back shoppers.
Neil Saunders, managing director of GlobalData Retail, said in September that most stores “feel tired, too big and cluttered and don’t offer the consumer a compelling reason to visit and shop”.
Barnes & Noble believes it will close more stores: “Barnes & Noble must slim down to survive.”
Barnes & Noble’s problems come as local and independent bookstores are on the rise.
The American Booksellers Association, a trade group, reported that the number of independent locations rose 6% last year to 2,470.