Barnes & Noble has put itself on the block.
The nation’s biggest bookstore chain — whose stores are struggling even as its chairman battles billionaire investor Ron Burkle over corporate governance — said it will explore strategic alternatives, including a possible sale.
Confirming months of investor speculation, Chairman Len Riggio said he might “participate in an investment group that buys the company.” Riggio and his family already control 37 percent of the company’s shares.
The news sent the stock– which had fallen 33 percent this year as business at the company’s stores has continued to weaken — soaring as much as 25 percent, to $16.05 a share in after-hours trading.
A sale could pit Riggio, a Bronx native who began building the chain after acquiring Barnes & Noble in 1971, against Burkle, a Los Angeles retail tycoon who last month sued to remove a poison pill while threatening to shake up the company’s board.
Last month, a Delaware judge pledged to deliver a swift verdict on whether to remove the poison pill, allowing Burkle to buy more voting shares ahead of the company’s annual meeting set for Sept. 30. If the judge rules in Burkle’s favor, Riggio’s move will make Burkle’s plan more costly.
A spokesman for Burkle didn’t respond to a request for comment yesterday. A Barnes & Noble spokeswoman declined to comment beyond a written statement from the company.
Testifying in a Delaware court last month, Burkle told the judge he had considered trying to acquire Barnes & Noble for as much as $25 a share but dropped the idea because Riggio’s clout would have made it “a waste of time.”
Burkle’s interest in the book chain has mystified many industry insiders, as the struggling retailer’s stores continue to falter while the company is falling behind in the fast-growing digital-books business.
But the savvy investor believes Barnes & Noble has a brand with a strong pull on consumers, in addition to enjoying dominance over publishers, according to people close to the situation.
His relationship with Riggio soured last year, when Burkle began amassing a nearly 20 percent stake and asked permission to raise it to 37 percent.
Riggio told a judge last month he “was completely unhappy” with Burkle’s involvement in the company.
“I didn’t think highly of his judgement,” Riggio testified.
Meanwhile, Burkle has blasted Riggio for selling a college bookstore chain last year to Barnes & Noble for $600 million — a deal that he said enriched Riggio and his wife at the expense of shareholders, who have been saddled with a bad investment.
Barnes & Noble said it selected Lazard as financial adviser and Morris, Nichols, Arsht & Tunnell LLP as legal adviser.