Liberty Media Takeover Bid for Barnes & Noble

Friday, May 20, 2011
By SHP

Liberty Media have made a cash tender offer of $17 per share for Barnes Noble.

Barnes Noble is the worlds largest bookseller, larger that Amazon.com. The offer price represents a 54% premium on the 50-day trading average for Barnes Noble (which is $11.03). Shares closed on Thursday at $14.13. The total takeover offer is $1 billion.

The offer will be subject to shareholder approval as well as various other conditions being met.

The brick-and-mortar book retailers are continuing to suffer with the increased demand in eBooks, although Barnes & Noble have innovated and developed their own eBook reader, the Nook. Barnes & Noble have 705 retail stores and 636 college book stores and also sell more than 2 million ebooks for their Nook. Nook currently holds around 20% of the eBook market.

However, Barnes & Noble are facing 3 fast growing competitors in the eBook market – Google with their new tablets, Amazon with its Kindle and Apple with the iPad. The book market is undergoing many changes and the eBook market is proving to be a fierce battle ground. Only yesterday we learn that Amazon’s eBook sales had overtaken its paper books.

The big question is, who will win the eBook War? Nook, Kindle, Google or Apple? So far Kindle holds the high ground but its technology does limit it. Can Amazon develop a Kindle to match the Google and Apple tablets? If it cannot then Amazon’s days could be coming to an end.

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