Barnes & Noble shares surge as activist investor urges company sale

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(Reuters)

Barnes & Noble shares jumped more than 12% in early trading Tuesday after an activist investor purchased a “meaningful” stake in the bookseller and called on the company to sell itself.

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Sandell Asset Management Corp. CEO Thomas E. Sandell, in a letter to Barnes & Noble's board, said "the public market for retail stocks is contributing to a risky and inhospitable environment" and the company would be better served if it were private or part of a larger company.

He did not disclose the amount of Sandell's stake.

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In the letter to board, Sandell said the company is the only "truly national bookstore chain" and compared its locations to "beachfront property." He said the company could get more than $12 per share.

Barnes & Noble’s stock was trading at roughly $8 as of 12:30 p.m. ET on Tuesday. Sandell’s investment came about one month after the bookseller reported smaller-than-expected losses in its most recent fiscal quarter.

Barnes & Noble CEO Demos Parneros said fiscal 2017 “proved to be a very challenging year” for the brand and attributed some of the struggles to lower in-store foot traffic.

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“We are well aware of the challenges that the company and the industry are facing. We view these challenges as great opportunities,” Parneros said at the time. “There’s no question that retail is changing and customers are shopping differently. We don’t view this as a winning or losing proposition, it’s just simply changing.”

The Associated Press contributed to this report.

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