Barnes & Noble Inc. (BKS)’s founder and chairman, Leonard Riggio, told the bookstore chain he is interested in buying its consumer business and spinning out the unit that makes the Nook tablet, a person familiar with the matter said.
Riggio, who still owns about 30 percent of the company’s stock, has told the board of his interest without starting a formal process yet, said the person, who asked not to be identified because the matter is private. Riggio has made a preliminary proposal and may make it more official this week, the person said.
Barnes & Noble posted a decline in holiday-season retail sales as the largest U.S. bookstore chain’s effort to take on Apple Inc. (AAPL)’s iPad with tablet-style Nooks fell short with shoppers. Riggio’s plan would keep the 689 consumer bookstores, which generated $996 million in sales during the quarter ended in October, the person said. A collegiate unit, which had $773 million in sales during the quarter, and the Nook-making technology unit with $160 million in sales would be separated.
Mary Ellen Keating, a Barnes & Noble spokeswoman, declined to comment in an interview. Riggio’s plan was reported earlier by the Wall Street Journal.
The New York-based bookseller’s board has formed a special committee to study a proposal if it is made, the person said, adding that Evercore Partners Inc. (EVR) is advising the panel on the matter. Riggio, 71, is working with boutique investment bank Peter J. Solomon Co., the person said.
Diane Coffey, a spokeswoman for Peter J. Solomon, declined to comment. A spokesman for Evercore also declined to comment.
Barnes & Noble is scheduled to report fiscal third-quarter earnings on Feb. 28. The company’s shares have lost more than half their value in five years, closing at $13.51 on Feb. 22. The Standard & Poor’s 500 Stock index gained 12 percent in the same period.
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