Amazon killed Barnes & Noble, now he should buy it

Barnes & Noble Inc. (BKS) is on sale and the company that killed the bookseller – Amazon.com.com (AMZN) – should buy it.

According to reports, one of the most likely buyers is Leonard Riggio, executive chairman of Barnes & Noble, which holds 19.2% stake in the company. But that should not stop Amazon from looking at the books of the erm … bookseller.

Amazon could take all Barnes & Noble inventory and put everything on its website, thus taking the last slice of the BKS book market. It would not be a revolutionary initiative, but why let another company compete in online book sales? Why not just take the books?

The second question is feasibility. What really makes this obvious to me, is that Barnes & Noble is obviously a small company now, with a market capitalization of 398.68 million dollars. Amazon has about $ 20 billion in cash. Assuming a premium of about 20%, Amazon could buy the distressed book retailer for about $ 477 million.

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The last question is what do the shareholders of Barnes & Noble want? They want the best deal possible, and if Amazon really wants to buy it, it can easily outbid on Riggio, whose net worth is well under $ 1 billion. We will have to see what other bidders are, as the Wall Street Journal mentioned, there could be others, but the deep pockets of Amazon are a benefit.

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Amazon may be able to avoid real estate owned by Barnes & Noble. If Amazon has bought Barnes & Noble, it has some options to manage real estate. But anyway, Amazon should sell at least a large part. It's all a project, because the verification of a buyer takes time and Amazon wants to focus on selling products on its platform, not on the real estate that it has inherited. Therefore, Amazon could simply buy the Barnes & Noble inventory if the shareholders decided to liquidate all assets to various buyers, rather than exploring a pure sale of the company to a buyer.

But Barnes & Noble shareholders could make more money selling the company. This is why Amazon might want to make an offer if it is interested in another slice of the book market.

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