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Originally Posted by fjtorres
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But we live in parlous times, as the saying goes.
B&N stock price has flirted with $21, but Liberty Media's offer of $17 per share is more-or-less where the stock has floated since the announcement was made. It was trading as low as $9 only days before Liberty stepped in. B&N has its own woes: it is investing in its digital products (Nook and Nook books), spending so much to prime that pump that it has cut its dividend to zero.
Liberty's offer is a cosy one: Leonard Riggio and John Malone have issued gushy comments about each other's businesses in recent weeks; unlike the previous takeover bid last summer, this one is far from hostile.
The closing of Borders certainly won't hurt B&N but it won't pick up 100% of its sales, either. Borders represented less than 15% of trade book sales in 2010 in the US; for a variety of reasons -- including distance from a closed Borders store -- B&N is likely to see a 3 or 4% lift in US marketshare -- as much as 15% at the bricks and mortar side of the business. Or perhaps very little at all, depending on the economy and further consumer adoption of ebooks.
The chaos in Washington over the debt ceiling and budget talks can't be helping, nor is the persistent unemployment rate at over 9%. Liberty Media, at least based on public information, is hardly incented to rush along putting $1 billion on the table to purchase B&N -- given there is clearly no other party interested in being in the book business in the US. That is abundantly clear from the lack of bidders for Borders.