Barnes & Noble says lawsuits 'lack merit' as shareholders file against sale

Barnes & Noble says lawsuits 'lack merit' as shareholders file against sale

Shareholders have filed two lawsuits against Barnes & Noble in a legal row over the sale as the book retailer insists the complaints "lack merit". 

New York hedge fund and Waterstones owners Elliott entered into a $683m (£537m) agreement to acquire Barnes & Noble on Friday 7th June and details of the bid were revealed in court documents earlier this month.

On Thursday 18th July shareholder Richard Scarantino filed against Barnes & Noble in a Delaware Federal Court, seeking class status on behalf of shareholders.

The filing alleges the company did not disclose certain required information in their offer including “material information regarding the company’s financial projections” for the future as well allegedly omitting information “regarding potential conflicts of interest” of financial advisors Evercore and Guggenheim Securities. 

Scarantino's suit echoes a similar filing by shareholder David Shaev on 17th July which also challenges disclosures. Shaev's filing states: "B&N’s shareholders lack the information necessary to allow them to make an informed decision when determining whether to tender their shares."

Both suits, which have filed against Barnes & Noble corporation and its directors, allege that Barnes & Noble left out some details of analysis from Evercore and Guggenheim Securities.

In light of the lawsuits, Barnes & Noble has updated its tender offer documents, adding: "The defendants believe that these complaints lack merit but cannot predict the outcome of these matters." 

The Elliott deal is expected to close in the third quarter. The Bookseller has contacted Elliott for comment. Barnes & Noble had no further comment to make.