Elliott deal for Barnes & Noble goes through, Daunt heads to New York

Waterstones owner Elliott Advisors has completed its $683m (£537m) acquisition of US book giant Barnes & Noble following approval by the majority of shareholders. The buy sees James Daunt, c.e.o. of Waterstones, also become chief executive of the US firm. Daunt will now relocate to New York, Elliott Advisors said.

Daunt said his time will be split between London and New York. Kate Skipper, chief operating officer of Waterstones, will run the UK chain in his absence. The announcement was made on 7th August ahead of the New York stock exchange opening for trading.

Daunt said: “This is a very good day for bookselling. Barnes & Noble is the greatest of all bookstore names and will now benefit from the support of an owner committed to physical bookselling. With investment and concentration on the core principles of good bookselling, the prospects for this extraordinary company are bright. I look forward very much to working with the booksellers at Barnes & Noble, being already indebted to Len Riggio for his wisdom and grateful for the welcome and professionalism of the executive team during the acquisition process.”

Paul Best, portfolio manager and head of European private equity at Elliott, added: “Our investment in Barnes & Noble, following our acquisition of Waterstones just over a year ago, demonstrates our commitment to bookselling and to real bookstores.  Barnes & Noble has an extraordinary heritage, one that we want to protect and grow.  We look forward to working with James Daunt and the Barnes & Noble management team in this exciting endeavor.”

Elliott's tender offer expired at 5pm EST yesterday (7th August). A total of 60,370,427 shares of common stock of Barnes & Noble, representing approximately 82.15% of the outstanding Barnes & Noble shares, were validly tendered into and not validly withdrawn from the tender offer, meaning the deal was satisfied.

Daunt told The Bookseller that, with Waterstones in a “settled state”, he expected to spend around 75% of his time in New York, with the rest in London. He said: “The majority of my time will be over there, certainly to begin with, not least because that’s where the heavy-lifting part of the job is.”

He said the move was very good news for UK bookselling because a healthy trade in the States benefited businesses on both sides of the Atlantic. He said: “A world that was just Amazon in the US would be very alarming for us in the UK.”

Daunt had previously said  he needed to get to know the new company but was not expecting to make any major changes to the number of stores.

When the original offer was made in June, he told The Bookseller: "There is an inherent logic to it. Waterstones had faced the same trials and tribulations, and although the retail climate is different in the US, we operate in broadly similar ways. There is also an element of self-interest; it really matters to us that Barnes & Noble can continue to do what it does, and it really matters that publishers can continue to sell print books through these stores, as well as, obviously, through Amazon."

In the wake of Elliott’s interest, distribution firm Readerlink had prepared a rival bid for the book firm. That was eventually rebuffed, but some shareholders had warned in a public filing that Elliott’s valuation did not maximise value for shareholders.

Barnes & Noble is the largest bookseller in the US with 627 bookstores across all 50 states and sales of $3.662bn for the 2018 fiscal year.

The deal marks the end of its history as a publicly listed company.