BASKING RIDGE, NJ – Barnes & Noble Education, Inc. (NYSE: BNED), a leading provider of education solutions, announced the initiation of a shareholder rights plan approved by its Board of Directors. The plan provides for the distribution of a dividend equal to a right to purchase preferred shares for each outstanding ordinary share, starting from April 29, 2024.
The rights plan is designed to be triggered if an individual or group acquires 10% or more of the company’s common stock, with some exceptions. These rights allow stockholders, excluding the purchasing person or group, to purchase a fractional share of a new series of junior participating preferred stock for $5.00. If the 10% threshold is exceeded, each right will allow the holder to purchase more ordinary shares at a market value double the exercise price.
The Board of Directors has the option to redeem the rights for one cent each before a 10% quota is reached. Furthermore, once the 10% threshold is exceeded, the Board will be able to exchange one ordinary share for each existing right, rendering the buyer’s rights null and void.
Derivative positions that create synthetic interests in securities are treated as beneficial ownership of common shares equivalent to the economic exposure created by the derivative position, to the extent the beneficial shares are held by the counterparties to the derivative contracts.
The rights, which are not taxable to members, will expire on January 31, 2025, unless previously redeemed or exchanged. Details of the rights plan will be outlined in a Form 8-K filed with the Securities and Exchange Commission.
Legal advice for the company is provided by Paul Hastings LLP and Houlihan Lokey (NYSE:), Inc. is serving as financial advisor.
This announcement is based on a press release.
Insights on InvestingPro
As Barnes & Noble Education, Inc. (BNED) implements its shareholder rights plan, investors are closely monitoring the company’s financial metrics and market performance. InvestirePro provides real-time data and professional insights that can help investors make informed decisions.
BNED’s market capitalization stands at a modest $37.21 million, reflecting the company’s current valuation on the market. Added to this is a price-to-book ratio as of Q3 2024 of just 0.37, indicating that the stock may be trading at a low valuation relative to the company’s book value. This could be an interesting entry point for value investors, as highlighted by one of the Professional investment tipswhich highlights that BNED trades at a low price/book multiple.
Despite the challenges, BNED reported revenue growth of 3.05% over the trailing twelve months as of Q3 2024, suggesting some operational progress in the broader market context. The company’s stock price has seen significant volatility, returning 15.89% over the past month, in contrast to a decline of 53.12% over the past year. This high price volatility is also underlined by another Tip for InvestingProwhich warns investors about the stock’s generally high price volatility.
For those considering an investment in BNED, InvestirePro offers numerous additional tips, 12 in total, that can help you navigate the complexities of this title. Interested investors can benefit from an exclusive offer by using the coupon code PRONEWS24 to get an additional 10% discount on an annual or two-year Pro and Pro+ subscription, providing even more insights to guide their investment strategies.
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