Liberty Media Wants Barnes & Noble For $1 Billion

05/20/2011 01:03 pm ET | Updated Jul 20, 2011

NEW YORK -- Barnes & Noble Inc.'s stock jumped more than 24 percent in premarket trading on Friday as the company reported that Liberty Media Corp. has offered to buy it in a deal valued at about $1 billion.

Shares of the nation's largest traditional bookseller gained $3.49, or 24.7 percent, to $17.60 in premarket trading.

Barnes & Noble said Thursday that the cash offer is worth $17 a share from the conglomerate chaired by billionaire media mogul John Malone. The offer values Barnes & Noble shares 21 percent higher than their Thursday closing price of $14.11.

The companies have yet to sign an agreement.

David Strasser of Janney Capital Markets said in a client note that the $17 per share bid is not enough, based on Barnes & Noble's near- and long-term prospects as they build up their e-Book platform.

Strasser values Barnes & Noble's stock at $20 per share and initiated coverage with a "Buy" rating.

The analyst said the bookseller put itself up for sale last August, but couldn't find a buyer.

"However, our view of the eBook opportunity and the transitory opportunity from the Borders Group Inc. bankruptcy makes this offer inadequate," he wrote.

Borders, based in Ann Arbor, Mich., is working to reorganize itself under bankruptcy court protection. Borders filed for Chapter 11 bankruptcy protection in February. It wants to emerge from bankruptcy protection by August or September as a smaller and profitable company.

Barnes & Noble, which is based in New York, has 705 stores nationwide and 636 book stores run by its Barnes & Noble College Booksellers LLC subsidiary.

Liberty Media, based in Englewood, Colo., runs three publicly traded companies -- Liberty Interactive Inc., Liberty Starz Group and Liberty Capital Group -- through which it runs home-shopping network QVC and movie channel operator Starz LLC and holds stakes in numerous other online, media and communications companies.

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