Barnes & Noble to separate its college unit from Nook and its stores
February 26, 2015 09:13 AM
(Bloomberg)—Barnes & Noble Inc., the largest bookstore chain, will split off its college-focused business from its retail and Nook e-reader operations, creating two publicly traded companies.
As part of the breakup, shares in the new Barnes & Noble Education business will be distributed tax-free to investors, the New York-based company said Thursday in a statement. The split is expected to be completed by the end of August.
The move follows months of deliberation over how to structure the business, which has suffered from a slowdown in bricks-and-mortar retail as well as heavy competition from Amazon.com Inc., No. 1 in the Internet Retailer 2014 Top 500 Guide, in e-readers.
In December, Barnes & Noble (No. 28), bought back Microsoft Corp.’s stake in the struggling Nook business, fueling speculation that the e-reader division would be spun off. At the time, Barnes & Noble said it was still speaking with potential partners and hadn’t made a decision over whether it would proceed with a spinoff or another transaction.
Barnes & Noble purchased the college division from company founder and current Chairman Len Riggio for $514 million in 2009. The business, which runs the bookstores at 714 campuses in the U.S., generated $1.75 billion in sales during the fiscal year ended in May.