Shares of Barnes & Noble Inc. gained the most in 11 months after Jana Partners LLC, a hedge fund that has pushed for companies to sell off assets, disclosed a 12 percent stake in the largest U.S. bookstore chain.
The New York-based retailer rose 18 percent to $13.41 at Monday's close in New York for the largest gain since May 20. The shares have declined 7.4 percent this year.
Barnes & Noble is considering separating its growing Nook digital unit into a separate company so investors will give it the higher valuation of a technology business. In March the company hired a new chief financial officer, Michael Huseby, who helped spin off two units while at Cablevision Systems Corp. Jana has taken an activist role in publisher McGraw-Hill Cos., proposing a plan last August to break up the company.
“This increases the possibility of action,” said Michael Glickstein, chief investment officer of G Asset Management LLC, a Barnes & Noble investor that has pushed for the company to spin off units. “Jana has experience in the publishing space, and a track record in finding value in breakup plays.”
Jana disclosed its stake and the purchase of 250,000 options to buy shares on April 20 after U.S. markets closed. It hasn’t reported a more detailed filing stating whether it will be a passive or active investor. The hedge fund is now the third-largest holder of Barnes & Noble, following founder and Chairman Leonard Riggio and Ron Burkle’s Yucaipa Cos., according to data compiled by Bloomberg.
Barnes & Noble put itself up for sale in 2010 following pressure from investor Burkle. The process ended with John Malone’s Liberty Media Corp. investing $204 million in Barnes & Noble in August 2011.
Marathon Petroleum Corp., the crude refiner, considered an initial public offering of its pipeline assets in February two weeks after Jana bought a stake and began talks with the company.
Charles Penner, a spokesman for New York-based Jana Partners, declined to comment, as did Mary Ellen Keating, a spokeswoman for Barnes & Noble.
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