Barnes & Noble surges on takeover rumors

Barnes & Noble turnaround not fiction yet
Barnes & Noble turnaround not fiction yet

Once again, rumors are flying that Barnes & Noble is going private. Investors are loving it.

Shares of the bookseller jumped 8% after The Wall Street Journal reported that an activist investor made a $650 million proposal to take the company private.

Sandell Asset Management Corp, which bought a stake in Barnes & Noble in July, reportedly offered the company a plan that would value it at more than $9 a share. Shares of Barnes & Noble had been trading at $7.25 mid-day Thursday.

Barnes & Noble confirmed Sandell's offer in a statement, but said the company is skeptical that the deal could work as proposed. It added that Chairman Leonard Riggio "has no intention" of participating in Sandell's plan.

This isn't the first time Sandell has attempted to take Barnes & Noble private.

Barnes & Noble's (BKS) stock spiked 17% in July after Sandell approached it with an offer, but the bookstore rebuffed the plan.

The trouble Barnes & Noble faces are familiar for retailers: Amazon has eaten into sales at its 632 locations across the country, leading to tumbling profit over the past several years. Sales were down more than 6% last year.

Related: Barnes & Noble reeling as Amazon eats its lunch

"2017 has proved to be an extremely challenging year for Barnes & Noble," chairman Leonard Riggio wrote in a June letter to shareholders. "Consumers are changing their shopping behavior and we have to do a better job of anticipating their needs."

Despite the boost it received from takeover rumors, the bookseller is down 35% this year and more than 50% over the past three years.

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