Barnes & Noble to spin off Nook tablets
Samsung Galaxy Tab 4 NOOK
(Reuters) Bookseller Barnes & Noble Inc said it would spin off its Nook tablets and college books business, sending its shares up about 8 percent in early trading.
The Nook business has cost the company hundreds of millions of dollars as it tried to keep pace with deep-pocketed rivals such as Amazon.com Inc, Apple Inc and Google Inc.
Barnes & Noble said this month it would develop a tablet with Samsung Electronics Co Ltd after curbing production of Nook tablets last year because of the losses.
Barnes & Noble said on Wednesday it more than halved its quarterly loss as it spent less on making and marketing Nooks.
The unit to be spun off, Nook Media, consists of the company’s digital content, e-readers and tablets and college bookstores. It is 17 percent-owned by Microsoft Corp while Pearson Plc owns 5 percent.
The company said it plans to complete the separation by March 2015.
“We have determined that these businesses will have the best chance of optimizing shareholder value if they are capitalized and operated separately,” Chief Executive Michael Huseby said in a statement on Wednesday.
Loss before interest, taxes, depreciation, and amortization at the Nook business narrowed 69 percent to $56 million (32.96 million pounds) in the fourth quarter.
Investment firm G Asset Management said in February it offered to buy a 51 percent stake in either Barnes & Noble or in the Nook digital business, valuing the unit at about $300 million.
Barnes & Noble said on Wednesday it expects retail comparable bookstore sales and core comparable bookstore sales, which exclude sales of Nook products, to decline in the low-single digits in the next full year.
Barnes & Noble’s net loss narrowed to $36.7 million, or 72 cents per share, in the quarter ended May 3, from $114.8 million, or $2.04 per share, a year earlier.
Revenue rose 3 percent to $1.32 billion.
Shares were trading at $22.14 on the New York Stock Exchange on Wednesday.
(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Don Sebastian)
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