Liberty Media Drops Takeover Bid of Barnes and Noble, Invests $204 Million Instead

Posted on August 21, 2011

The Wall Street Journal reports that Liberty Media (which also owns QVC) has withdrawn its $1 billion offer to buy Barnes and Noble. Instead, Liberty invested $204 million to buy preferred shares of the company. The shares are convertible into 16.6% of the company's stock. The stock market did not like the news: Barnes and Noble's stock was down to $9.98 a share at close Friday.

The board of directors has been sitting on the Liberty purchase offer for months, and some analysts think they waited too long. In the interim, Barnes and Nobles' share price continued to fall and now Liberty thinks it overvalued the book retailer.

Investor Ron Burkle, who owns 20% of the company and who wants big changes, issued a grumpy statement that said, "While we have grave concerns about the process and the pricing, we welcome Barnes & Noble gaining access to Liberty Media's expertise." Barnes and Noble will use the cash infusion to focus on its digital products, including the Nook ebook reader. So, for now, Barnes and Noble is off the market.