US book distributor ReaderLink LLC is preparing a bid for Barnes & Noble that could beat the price agreed by Waterstones owner Elliott Advisors Ltd, it has been reported.
On Friday 7th June, Elliott announced it had agreed to acquire the US book chain for $683m (£537m), including the assumption of debt. The hedge fund confirmed James Daunt, c.e.o, of Waterstones would also become chief executive of Barnes & Noble, splitting his time between London and New York, once the takeover is complete.
However, according to a report in the Wall Street Journal, ReaderLink LLC is working towards making a rival bid.
The merger agreement reached by Elliott contains a “keep-shop” provision, stating Elliott would be entitled to a $4million payment if B&N strikes a deal with a third party before 11.59pm ET on 13th June, the paper reported. There would be a $17.5million break-up fee after that.
A source told the WSJ ReaderLink, the largest distributor of hardback, trade and paperback books to non-trade channel booksellers in the US, was attempting to get financing before the cut-off date and could join with another investor.
Barnes & Noble is North America’s largest bookseller with 627 bookstores and sales of $3.662bn for the fiscal year 2018.
On agreeing the Elliott deal last week, its founder and chairman Leonard Riggio, who owns around 19% of the firm's stock, said he had “admired” Waterstones for many years.
He said: “In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead. I am also confident that James Daunt has the leadership ability and experience necessary to lead this great organisation. I will do everything I can to help him make the transition smooth.”
Barnes & Noble declined to comment on the latest development. The Bookseller has contacted Waterstones and ReaderLink for a comment.