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Barnes & Noble Faces Tough Choices in a Buyout Vote

by Steven M. Davidoff
Publication: New York Times

May 26, 2011


The following is an excerpt from an online New York Times DealBook article which mentions a paper co-authored by Finance Professor Matt Cain.  To read the entire article visit:  Barnes & Noble Faces Tough Choices in a Buyout Vote

Conflicts loom large for the Barnes & Noble board.

I am referring to a point mentioned in my column on Tuesday about the challenge for the Barnes & Noble board. It is faced with managing a sale process in which Leonard Riggio, the bookseller’s chairman and 30 percent shareholder, has been invited to take part in Liberty Media’s proposed buyout of the Barnes & Noble.

According to people close to Barnes & Noble, there have been substantive discussions between Mr. Riggio and Liberty Media concerning a transaction, although no formal agreement has been reached.

These types of management buyouts are always problematical. Management can be accused of using its position to underpay for the company or otherwise manipulate the sale process to its benefit.