September 7, 2018 / 3:13 PM / 8 months ago

Barnes & Noble shares soar after investor discusses sale with founder

(Reuters) - Shares of Barnes & Noble Inc jumped as much as 21 percent on Friday after investor Richard Schottenfeld disclosed a higher stake in the bookseller and said he had discussed with its founder a possible sale of the company.

A woman looks at books inside a Barnes & Noble Booksellers store in Manhattan, New York City, New York, U.S., June 17, 2016. REUTERS/Mike Segar

Schottenfeld disclosed a stake of 6.9 percent late on Thursday in a regulatory filing. His stake stood at 5.7 percent on July 12.

Schottenfeld’s investment firm, Schottenfeld Management Corp, is Barnes & Noble’s fourth-largest shareholder, according to Thomson Reuters data.

Schottenfeld said he expects to continue his talks with the company’s founder-chairman, Leonard Riggio, and its management over filling top leadership positions with executives who could reverse years of falling sales and consider all opportunities for a possible sale.

The company fired Chief Executive Officer Demos Parneros in July over allegations of sexual harassment and other inappropriate behavior and said it would begin the process to find a replacement only after its annual shareholder meeting in early October.

Parneros sued the company in August and also accused Riggio of engineering his firing after turning on him when an unnamed company withdrew a takeover bid for the company in early June.

A Barnes & Noble spokeswoman declined to comment on Schottenfeld’s filing but said the company is not engaged in a process to sell itself.

Sales at Barnes & Noble’s book stores have suffered for years as customers’ shopping habits increasingly move online. Even the company’s Nook e-book reader has been largely overshadowed by Amazon’s Kindle and other tablets.

New York-based Barnes & Noble reported a bigger-than-expected first-quarter loss on Thursday, as sales were hit by a drop in demand and a glitch in the company’s website that stopped customers from looking up if their local store had a book in stock.

However, on a post-earnings call with analysts, Barnes & Noble said it expects sales to pick in fall, thanks to a slew of book releases, including Watergate reporter Bob Woodward’s “Fear: Trump in the White House”.

The company’s shares were up 11 percent at $5.05 in early afternoon trading on Friday. They touched a high of $5.50.

Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel

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