NEW YORK--(BUSINESS WIRE)--Sandell Asset Management Corp. (“Sandell”) has acquired a meaningful ownership stake in Barnes & Noble, Inc. (“BKS” or “Barnes & Noble” or the “Company”) (NYSE:BKS), the nation’s largest specialty book retailer, and today publicly released the following letter to the Board of Directors (the “Board”) of the Company:
|July 25, 2017|
|The Board of Directors|
|Barnes & Noble, Inc.|
|122 Fifth Avenue|
|New York, NY 10011|
|Ladies and Gentlemen:|
We are strong believers in the vital service that Barnes & Noble provides as the nation’s largest book retailer, and we have accumulated a meaningful ownership stake in the Company, as we think that the current approximately $520 million market value of Barnes & Noble is unconscionably low and fails to reflect the true value of the Company. As you are Board members of a retailer whose existence depends on people’s quest for knowledge, we trust you may be familiar with some of the following comments:
“A room without books is like a body without a soul” – Cicero
We believe that millions of readers in the United States share -
to varying degrees - the sentiments expressed in the above
quotations. Those shared sentiments help explain our conviction in
the potential value inherent in Barnes & Noble. As professional
investors, however, we also recognize that the “value” of a
publicly-traded company is measured by one sole metric: its stock
price. Unfortunately, by this critical measure, we do not believe
the true intrinsic value of BKS is being adequately reflected. To
put a fine point on this matter, according to Bloomberg, the
Enterprise Value (Market Value + Net Debt) of Barnes & Noble has
fallen to about 3.2x FY2018E EBITDA, lower than nearly every other
publicly-traded retailer. This in and of itself is
shocking considering the steep and across-the-board drop in retail
valuations that we have seen in 2017.
We look forward to being in contact.
Thomas E. Sandell
Chief Executive Officer
About Sandell Asset Management Corp.
Sandell Asset Management Corp. is a leading private, alternative asset management firm specializing in global corporate event-driven, multi-strategy investing with a strong focus on equity special situations and credit opportunities. Sandell Asset Management Corp. was founded in 1998 by Thomas E. Sandell and has offices in New York, Boca Raton, and London, including a global staff of investment professionals, traders and infrastructure specialists.
Cautionary Statement Regarding Opinions and Forward-Looking Statements
Certain information contained herein constitutes “forward-looking statements” with respect to the Company, which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” "could," “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities. Due to various risks, uncertainties and assumptions, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. The opinions of Sandell Asset Management Corp. and its affiliates ("Sandell") are for general informational purposes only and do not have regard to the specific investment objective, financial situation, suitability or particular need of any specific person, and should not be taken as advice on the merits of any investment decision. This material does not recommend the purchase or sale of any security. Sandell reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. Sandell disclaims any obligation to update the information contained herein. Sandell and/or one or more of the investment funds it manages may purchase additional shares or sell all or a portion of their shares or trade in securities relating to such shares.