G Asset Management B&N offer may be busted for lowballing
February 25, 2014 | 10:25 am
As readers of Chris Meadows’s report in TeleRead will already know, investment group G Asset Management has offered to buy out Barnes & Noble for around $1.3 billion. Now an announcement indicates that a shareholder litigation suit has been launched against the directors of B&N by former SEC attorney Willie Briscoe and securities litigation firm Powers Taylor LLP for entertaining an offer at too low a price.
“Barnes & Noble shareholders will receive just $22 in cash for each share of Barnes & Noble owned, which is below the 52-week high of $23.71 and well below at least one analyst’s estimated value of $30.00 per share,” claims the announcement. “The Barnes & Noble investigation centers on whether Barnes & Noble’s Board of Directors is acting in the shareholders’ best interests, whether the board is properly considering the proposed price for the shareholders, and whether the board has employed an adequate process to review and act on the proposed transaction.”
How much merit the case has remains to be decided. But it would be sad and ironic if one of B&N’s highest-profile recent attempts to really fix its problems and develop a forward-looking strategy, if necessary by splitting off the Nook division, were to be stymied by a hungry litigation firm and an over-optimistic share value assessment.