Barnes & Noble close to deal with Waterstones owner Elliott Management

Barnes & Noble (B&N) is close to securing a $436m deal to be bought by hedge fund Elliott Management, according to the Wall Street Journal (WSJ), amid speculation that Waterstones boss James Daunt could lead both retailers. 

If the deal goes through, Barnes & Noble will be the second bookshop chain Elliott has bought since 2018 after the New York hedge fund acquired Waterstones in May last year. Speculation is mounting that Waterstones m.d. Daunt could lead both retailers. Waterstones declined to comment. 

The private equity firm is the lead bidder in the auction for the US chain and is expected to pay $6.50 a share, the WSJ reports. At Thursday's close, B&N had a market value of $436m after stock went up 30% at $5.96. The deal, if successful, will mark the end of the once-dominant US book retailer as a publicly listed company. 

The deal - which could collapse - got underway in October, according to the WSJ, with multiple parties expressing an interest in the acquisition. 

B&N, which boasts 627 stores in the US, ended the fiscal year of 28th April 2018 with a loss of $125.5m as revenue fell 6% to $3.7bn. The chain had $129.3m in long-term debt, as of January, according to the WSJ.

The US chain has struggled to compete with Amazon in recent years and has also faced the revival of indie bookshops. In response B&N has grown its website and launched the Nook ereader. It has closed several stores, including its flagship. The deal, if successful, will mark the end of the once-dominant US book retailer as a publicly listed company. 

Under Daunt, Waterstones, which has around 293 shops in the UK and Ireland, has returned to profit, reporting an operating profit of £24.0m (excluding Ireland and Europe) and sales of £385.7m, in the year end to 2018.

As of January 2019, Elliott, which employs 464 people, says it manages approximately $34bn in assets.