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Barnes & Noble chairman Len Riggio appears to be financial brokers' favourites to take the bookseller private.
Publishers Weekly reports Riggio could benefit from B&N's low stock price, gloominess about the American bricks and mortar retail sector and the wealth of private equity money available. It quotes one mergers and acquisitions dealer who said: "It's a no lose situation [for Riggio]."
The trade magazine claimed this was because Ron Burkle, the second largest shareholder in the company, was suing the Barnes & Noble board over its recent passing of a poison pill provision. This provision would make it virtually impossible for Burkle, or another outside shareholder, to buy a stake in the company that could equal that of Riggio and other B&N insiders. A trial was held in July and a verdict is expected imminently.
Burkle is said to believe B&N's shares are undervalued and by putting the company up for sale, the retailer's board is testing whether Burkle is actually keen on a takeover. If he is not interested, Burkle's shares and all other outside shareholders are worth around $900m. However, Riggio, who owns 17.9m shares worth approximately $447.5m, is the man who could buy B&N the cheapest. "I don't see any group buying B&N that doesn't include Riggio," an M&A broker said.