Activist investor Sandell Asset Management Corp on Tuesday urged Barnes & Noble Inc (BKS.N) to sell itself, saying internet and media companies or private equity firms might be interested in buying the U.S. bookstore chain operator.
Sandell, which said it had accumulated a “meaningful” stake in Barnes & Noble, said the company could fetch a price of $12 per share or possibly higher in a “go-private” deal.
Shares of Barnes & Noble, which had a market value of $514.8 million as of Monday, were up 17.6 percent at $8.35 in premarket trading.
Barnes & Noble declined to comment.
Sales at Barnes & Noble’s stores have been sliding for years, hurt by competition from Amazon.com Inc (AMZN.O), as more shoppers go online to buy cheaper products as well as for convenience.
Barnes & Noble’s “robust cash flow” and low debt would make the company highly attractive to buyers such as private equity firms, Sandell said, adding that internet and media companies looking for a retail presence may also show interest.
Sandell suggested that Barnes & Noble’s founder and Chairman Leonard Riggio take the company private in a leveraged deal, similar to his attempt in 2013.
Sandell also asked the company to retain an investment banking firm to review strategic options.