Last week, I passed along that idea some financial analyst had about how Amazon.com should buy Barnes & Noble. We got an email from Michael Cairns at the publishing industry consulting firm Information Media Partners who told us “this is clearly not going to happen and not even interesting to speculate on”—not when you can crunch the numbers on B&N buying back all its publicly owned shares. To the Stifel Nicolaus analyst Cairns quotes, “the fundamentals of the company are strong with good cash flow, significant retail presence and store productivity… The company could perform better than management is suggesting and could be a [private equity] target.” As Cairns points out, though, with the management already owning more than 20 percent of the company’s shares, it’d really be more of a buyout.
But would the Riggios really want to do it? “While there are peaks and valleys in book retail, BN has been able to remain fairly consistent in delivering top line growth, strong operations and resulting good net income,” Cairns ventures. “Additionally, the capital requirements for this business wouldn’t be onerous and as such it would make a safe place to put PE dollars for a decent return.”