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Old 11-09-2011, 09:16 AM   #18
fjtorres
Grand Sorcerer
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Quote:
Originally Posted by Fringecup View Post
I read in The Globe & Mail newspaper today that Indigo kept their 51% share in Kobo and sold only the remaining outstanding shares to the Japanese company. Kobo is STILL majority-owned by Indigo.
The article is a little too literal in its phrasing. Try this:
Kobo currently owns 51% of Kobo.
Rakuten is paying $315 million for 100% of Kobo.
The deal closes in early 2012 so, while technically Indigo still owns Kobo, it is just a matter of paperwork. They cashed it in.

Indigo got a good deal: their Kobo stake will bring in ~$160 million which is roughly Indigo's market capitalization.

Note that Kobo,according to the article, commands around 8-12% of US market share vs Nook's 29% and Kindle's ~50%. Not much room for new players there, hence the big premium Rakuten paid.

Earlier this year, B&N reportedly came close to selling itself for $1Billion until Liberty Media got cold feet over the Borders bankruptcy. Based on the Kobo deal, B&N had better take another look at their financials. A Nook-spinoff IPO might be a better way to raise cash to keep the storefronts afloat than creative loans.

The Kobo sale values Nook at about a billion at a time B&N's market capitalization runs around $700 million. Much like Indigo's situation and Border's liquidation, those giant storefronts are not highly valued today:
http://finance.yahoo.com/q?s=BKS
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