Mendoza School of Business

Barnes & Noble Faces Tough Choices in a Buyout Vote

Published: May 26, 2011 / Author: Steven Davidoff

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.



Topics: Mendoza