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Shares of Barnes & Noble jumped more than 20 percent on Wednesday after it said it is naming a special committee to review bids for the company.
The retailer said in a statement it has received “expressions of interest” from “multiple parties,” including its Chairman Leonard Riggio, who founded the company in 1965.
Riggio “has committed to support and vote his shares in favor of any transaction recommended by the special committee,” Barnes & Noble said.
The bookseller’s shares shares have fallen 18 percent since January, having struggled to adjust to the current retail environment. In July, it fired CEO Demos Parneros for violating company policies. A group of leaders including CFO Allen Lindstrom and Chief Merchandising Officer Tim Mantel have been leading the company in the interim.
Today, Barnes & Noble faces heightened competition from the likes of Amazon Books and other retailers moving their book assortments online. Heading into the key holiday season, the company is struggling to grow sales against a backdrop of strong consumer confidence in the U.S. that’s boosted many retailers of late.
In the fiscal first quarter ended July 28, Barnes & Noble said total revenue declined 6.9 percent, while sales at those stores open for at least 12 months fell 6.1 percent from a year ago. Its same-store sales have fallen for 20 of the past 23 quarters.
Part of the bookseller’s turnaround plan has included closing some of its more than 600 stores across the U.S. and relocating to smaller spaces that receive a fresh and modern look. The company has said the new “prototype” stores encourage shoppers to buy books online or from a tablet.
Wednesday’s news comes a year after Barnes & Noble rejected a deal proposed by activist investor Sandell Asset Management, which had proposed taking it private. It was hindered, in part, by Riggio’s refusal to roll his shares into such a transaction.
Riggio still owns 19 percent of Barnes & Noble, according to Factset.
The retailer also said it has adopted a short-term “poison pill plan” after noticing “rapid material accumulations of its stock.” The plan, which expires Oct. 2 2019, gives Barnes & Noble shareholders preferred shares at a 50 percent discount, should a person or group acquire 20 percent or more of Barnes & Noble, by buying up stock or through a tender offer.
The board is being advised by investment bank Guggenheim Securities and law firm Paul, Weiss, Rifkind, Wharton & Garrison.
The retailer will disclose advisors to the special committee “at a later date,” it said.
Barnes & Noble has a market cap today of roughly $398.7 million.