Barnes & Noble to Be Acquired by Elliott, Owner of Waterstones, Bringing Together the Leading Booksellers in the US and the UK

All-cash acquisition of $6.50 per share delivers a significant premium
for all shareholders


Transaction concludes Barnes & Noble strategic alternative review


Elliott to pursue growth strategy at Barnes & Noble, empowering local
stores across the US, while benefitting from international scale

NEW YORK & LONDON–(BUSINESS WIRE)–Barnes & Noble, Inc. (NYSE:BKS, “Barnes & Noble”) announces today that
it has entered into a definitive agreement to be acquired by funds
advised by Elliott Advisors (UK) Limited (“Elliott”) for $6.50 per share
in an all-cash transaction valued at approximately $683 million,
including the assumption of debt.


Elliott’s acquisition of Barnes & Noble, the largest retail bookseller
in the United States, follows its June 2018 acquisition of Waterstones,
the largest retail bookseller in the United Kingdom. James Daunt, CEO of
Waterstones, will assume also the role of CEO of Barnes & Noble
following the completion of the transaction and will be based in New
York.


The $6.50 per share purchase price represents a 43% premium to the
10-day volume weighted average closing share price of Barnes & Noble’s
common stock ended June 5, 2019, the day before rumors of a potential
transaction were reported in the media.


The announced transaction with Elliott is the culmination of an
extensive Strategic Alternative Review conducted by the Special
Committee of the Barnes & Noble Board of Directors, which was announced
on October 3, 2018. The Board of Directors of Barnes & Noble unanimously
approved the transaction and recommend the transaction to Barnes & Noble
shareholders. Leonard Riggio, the Founder and Chairman of Barnes &
Noble, has also entered into a voting agreement in support of the
transaction.


Barnes & Noble serves 627 different communities across all 50 states,
where it remains the #1 bookseller in the United States. Elliott seeks
to build upon this strong foundation as it addresses the significant
challenges facing the bricks and mortar book retail space, applying a
model that successfully turned around Waterstones over the past decade.


Following the close of the transaction, Elliott will own both Barnes &
Noble and Waterstones, and while each bookseller will operate
independently, they will share a common CEO and benefit from the sharing
of best practice between the companies. Waterstones has successfully
restored itself to sales growth and sustainable profitability, based on
a strategy of investment in their store estate and the empowerment of
local bookselling teams. Under Daunt’s leadership and Elliott’s
stewardship, this commitment to bookselling excellence will strengthen
the ability of both companies to navigate with success a rapidly
changing retail landscape.


With respect to today’s announcement, Leonard Riggio, Founder and
Chairman of Barnes & Noble, stated, “We are pleased to have reached this
agreement with Elliott, the owner of Waterstones, a bookseller I have
admired over the years. In view of the success they have had in the
bookselling marketplace, I believe they are uniquely suited to improve
and grow our company for many years ahead. I am also confident that
James Daunt has the leadership ability and experience necessary to lead
this great organization. I will do everything I can to help him make the
transition smooth. Having been the leader of Barnes & Noble for 54
years, I have had the privilege of working with the very best people in
all the world of bookselling, including our great store managers and
booksellers, who work in our stores. It is they who have made Barnes &
Noble the #1 most reputable retailer in America. My profound thanks, as
well, to the entire publishing world, with whom we have shared a great
relationship over the years, and the many suppliers who have provided
vital services. Finally, to our tens of millions of wonderful customers
and Members, it has been a privilege to serve them.”


In anticipation of his new CEO role at Barnes & Noble, James Daunt
added, “I look forward greatly to working with the booksellers at Barnes
& Noble. Physical bookstores the world over face fearsome challenges
from online and digital. We meet these with investment and with all the
more confidence for being able to draw on the unrivalled bookselling
skills of these two great companies. As a place in which to choose a
book, and for the sheer pleasure of visiting, we know that a good
bookstore has no equal. I thank Mr. Riggio for his confidence, and I am
grateful to Elliott for their commitment to support the continued
transformation at Waterstones, and now also the same at Barnes & Noble.”


Paul Best, Portfolio Manager and Head of European Private Equity at
Elliott, added, “Our investment in Barnes & Noble, following our
investment last year in Waterstones, demonstrates our conviction that
readers continue to value the experience of a great bookstore. We would
like to acknowledge the contributions of Founder and Chairman Leonard
Riggio and his team for creating the leading bookstore company in the
United States. We look forward to working with James Daunt and the
Barnes & Noble community of readers, members and booksellers as they
start an exciting new chapter.”


The transaction is subject to customary closing conditions, including
the receipt of regulatory and stockholder approval, and is expected to
close in the third quarter of 2019. The merger agreement provides for
the acquisition to be consummated through a merger structure. However,
the parties expect to amend the agreement to utilize a tender offer
structure, which is expected to reduce the time to closing by a number
of weeks.


Dividend


Barnes & Noble also announced that it has declared a quarterly cash
dividend of $0.15 per share, payable on August 2, 2019 to stockholders
of record at the close of business on July 5, 2019.


Fiscal 2019 Year-End Earnings Announcement


Barnes & Noble separately announced that it will be reporting its fiscal
2019 fourth quarter and year-end financial results on June 19, 2019.


Advisors


Evercore is acting as financial advisor and Baker Botts L.L.P. is acting
as legal advisor to the Special Committee of Barnes & Noble and
Guggenheim Securities LLC is acting as financial advisor and Paul,
Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to the
Board of Directors of Barnes & Noble. Credit Suisse Securities L.L.C. is
acting as financial advisor and Debevoise & Plimpton LLP is acting as
legal advisor to Elliott.


About Elliott


Elliott Management Corporation manages two multi-strategy funds which
combined have approximately $34 billion of assets under management. Its
flagship fund, Elliott Associates, L.P., was founded in 1977, making it
one of the oldest funds of its kind under continuous management. The
Elliott funds’ investors include pension plans, sovereign wealth funds,
endowments, foundations, funds-of-funds, and employees of the firm.
Elliott Advisors (UK) Limited is an affiliate of Elliott Management
Corporation.


About Barnes & Noble, Inc.


Barnes & Noble, Inc. (NYSE:BKS) is the nation’s largest retail
bookseller, and a leading retailer of content, digital media and
educational products. The Company operates 627 Barnes & Noble bookstores
in 50 states, and one of the Web’s premier e-commerce sites, BN.com (www.bn.com).
The Nook Digital business offers a line-up of popular NOOK® tablets and
eReaders and an expansive collection of digital reading and
entertainment content through the NOOK Store®. The NOOK Store (www.nook.com)
features digital books, periodicals and comics, and offers the ability
to enjoy content across a wide array of popular devices through Free
NOOK Reading Apps available for Android, iOS® and Windows®. General
information on Barnes & Noble, Inc. can be obtained by visiting the
Company’s corporate website at www.barnesandnobleinc.com.


About Waterstones


Waterstones is the UK and Ireland’s leading high street
bookseller with 293 bookshops, including Foyles, Hatchards, Hodges
Figgis and branches in Ireland, Brussels and Amsterdam. It is the only
national specialist book retailer of scale in the UK, and operates also
through the e-commerce site, Waterstones.com.


Caution Regarding Forward-Looking Statements


This communication contains certain forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended) that
are based on the beliefs of the Company’s management, as well as
assumptions made by, and information currently available to, the
Company’s management. When used in this communication, the words
“anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “will,”
“forecasts,” “projections,” or other words or phrases of similar import
or future or conditional verbs such as will, may, might, should, would,
could, or similar variations, identify forward-looking statements. These
include statements relating to the financial and operational impact of
the proposed transaction, the benefits of the proposed transaction, the
expected timing of completion of the proposed transaction, as well as
other statements that are not historical facts. These statements reflect
only the Company’s current expectations and are not guarantees of future
performance or results. Forward-looking information involves risks,
uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in, or reasonably
inferred from, such statements. These factors include, among others, the
timing, receipt and terms and conditions of any required governmental
and regulatory approvals of the proposed transaction; the occurrence of
any event, change or other circumstances that could give rise to the
termination of the Merger Agreement; the inability to complete the
proposed transaction in a timely manner or at all; the possibility that
stockholders may not adopt the Merger Agreement; risks regarding the
failure of Parent to obtain the necessary financing to complete the
Merger; the risk of any unexpected costs or expenses resulting from the
proposed transaction, the risk of any litigation relating to the
proposed transaction, the risk that the proposed transaction and its
announcement could have an adverse effect on the Company’s ability to
retain customers and retain and hire key personnel and maintain
relationships with its suppliers, customers and other business
relationships; risks related to disruption of management’s attention
from the Company’s ongoing business operations due to the transaction;
the effect of the announcement of the proposed transaction on the
Company’s stock, operating results and business generally; and the risk
of stockholder litigation in connection with the proposed transaction.
All such factors are difficult to predict and are beyond the Company’s
control. Additional factors that could cause results to differ
materially from those described above can be found in the Company’s most
recent Annual Report on Form 10-K, as it may be updated from time to
time by quarterly reports on Form 10-Q and current reports on Form 8-K
all of which are available on the Company’s website at
and on the SEC’s website at
Therefore, caution should be taken not to place undue reliance on any
such forward-looking statements. These forward-looking statements speak
only as of the date of this communication, and the Company expressly
disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statement contained herein to reflect
any change in its expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is based.


Additional Information and Where to Find It


This communication does not constitute an offer to sell or the
solicitation of an offer to buy our securities or the solicitation of
any vote or approval. The proposed Merger of the Company will be
submitted to the Company’s stockholders for their consideration. In
connection with the proposed transaction, the Company intends to file a
proxy statement and other relevant materials with the SEC in connection
with the solicitation of proxies in connection with the proposed
transaction. The definitive proxy statement will be mailed to the
Company’s stockholders. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION
WITH RESPECT TO THE PROPOSED TRANSACTION, INVESTORS AND STOCKHOLDERS OF
THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT REGARDING
THE PROPOSED TRANSACTION (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
THERETO) AND OTHER RELEVANT MATERIALS CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. The proxy statement, any
amendments or supplements thereto and other relevant materials, and any
other documents filed by the Company with the SEC, may be obtained once
such documents are filed with the SEC free of charge at the SEC’s
website at www.sec.gov.
Copies of the filings together with the materials incorporated by
reference therein will also be available, without charge, on the
Company’s corporate website at www.barnesandnobleinc.com
under “Investor Relations” – “SEC Filings.”


The Merger Agreement may be amended in order to effect the acquisition
of the Company through a tender offer, though no tender offer for the
outstanding shares of the Company has commenced. This communication is
for informational purposes only and is neither a recommendation, an
offer to purchase nor a solicitation of an offer to sell shares. It is
not a substitute for the tender offer materials that the offeror would
file with the SEC upon commencement of the tender offer, if the parties
amend the Merger Agreement in order to effect the acquisition of the
Company through a tender offer. At the time the tender offer is
commenced, if the parties so amend the Merger Agreement, the offeror
will file tender offer materials on Schedule TO, and the Company
thereafter will file a Solicitation/Recommendation Statement on Schedule
14D-9 with the SEC with respect to the tender offer. IF THE MERGER
AGREEMENT IS SO AMENDED, THE TENDER OFFER MATERIALS (INCLUDING AN OFFER
TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER
OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT WILL
CONTAIN IMPORTANT INFORMATION. HOLDERS OF SHARES OF COMMON STOCK OF THE
COMPANY ARE URGED TO READ ANY SUCH DOCUMENTS CAREFULLY IN THEIR
ENTIRETY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AS
WELL AS ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT
HOLDERS OF SHARES OF COMMON STOCK OF THE COMPANY SHOULD CONSIDER BEFORE
MAKING ANY DECISION REGARDING TENDERING THEIR SHARES. If the Merger
Agreement is amended to contemplate a tender offer as described above,
the Offer to Purchase, the related Letter of Transmittal and certain
other tender offer documents, as well as the Solicitation/Recommendation
Statement, will be made available to all holders of shares of common
stock of the Company at no expense to them. The tender offer materials,
the Solicitation/Recommendation Statement and other related documents
(when available) would be made available for free at the SEC’s website
at www.sec.gov
or by directing a request to the Information Agent for the tender offer
who would be named by the offeror in the tender offer materials.


Participants in the Solicitation


The Company, directors, executive officers, other members of management
and employees of the Company may, under the rules of the SEC, be deemed
to be “participants” in the solicitation of proxies from the Company’s
stockholders in connection with the proposed transaction. Information
regarding the persons who may be considered “participants” in the
solicitation of proxies will be set forth in the Company’s preliminary
and definitive proxy statements when filed with the SEC and other
relevant documents to be filed with the SEC in connection with the
proposed transaction, each of which can be obtained free of charge from
the sources indicated above when they become available. Information
regarding certain of these persons and their beneficial ownership of the
Company’s common stock is also set forth in the Company’s definitive
proxy statement for the Company’s 2018 annual meeting of stockholders,
which was filed with the SEC on August 24, 2018.


Contacts

Barnes & Noble


MediaMary Ellen KeatingSenior Vice PresidentCorporate
CommunicationsBarnes & Noble, Inc.+1 (212)
633-3323mkeating@bn.com


InvestorsAndy MilevojVice PresidentCorporate
Finance and Investor RelationsBarnes & Noble, Inc.+1
(212) 633-3489amilevoj@bn.com


Elliott


LondonSarah Rajani CFAElliott Advisors (UK)
Limited+44 (0) 20 3009 1475srajani@elliottadvisors.co.uk


New YorkStephen SpruiellElliott Management
Corporation+1 (212) 478 2017sspruiell@elliottmgmt.com