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Barnes & Noble, the bookselling chain that has fallen on tough times as Amazon’s business model has ascended, is being sold to a hedge fund controlled by Elliott Management Corp., an investment firm led by billionaire Paul Singer.

The cost: $683 million, including debt, which the Washington Post points out is “a 33% premium to Barnes & Noble’s average closing price over the last 20 trading sessions.”

NPR notes that “the move marks Elliott's second major splash in the world of books in the span of a year. Last June the New York-based hedge fund acquired Waterstones, which, with more than 280 bookshops, is the largest retail bookseller in the U.K.”

Barnes & Noble traces its roots back to the Great Depression, when a single store operated in New York; now it has more than 600 stores around the country and is described as the country’s largest operator of bookstores, though the Washington Post points out that this is “a title that means little today.”
KC's View:
The good news for Barnes & Noble is that the sale means it no longer will operate as a public company, which gives it room to maneuver away from the pressures of the stock market and broader investment class. It remains to be seen whether being owned by a hedge fund will be a good thing, though at least the hedge fund isn’t controlled by Eddie Lampert (who has done little but screw up Sears since he bought it).

It also is an open question whether consolidating Barnes & Noble’s and Waterstones’ management is going to be flexible enough to address the competitive issues that they face. While Barnes & Noble has suffered at the hands of Amazon, independent booksellers - which have been nimble in their ability to find and exploit competitive advantages - have fared better.