Microsoft and Barnes & Noble are teaming up to take on Amazon and Apple. The $300 million investment in the Nook subsidiary of Barnes & Noble gives Microsoft about 17.6% ownership of this business unit and values it at about about $1.7 billion, more than Barnes & Noble itself.

NOOK Simple Touch with GlowLight_Angled
photo: Barnes & Noble

Microsoft and Barnes & Noble have buried the patent hatchet and teamed up to compete against Apple and Amazon in the eBooks business. The new partnership sees Microsoft investing $300 million in a new Barnes & Noble subsidiary. (My colleague Laura Owen has the complete breakdown of the deal over on paidContent.)

The $300 million investment in the  Nook subsidiary of Barnes & Noble gives Microsoft about 17.6 percent ownership of this business unit. That values this part of the business at about $1.7 billion. Before the markets opened this morning, the Nook business was valued about $900 million more than Barnes & Noble itself.

Update: Barnes & Noble stock zoomed at the opening bell – and is now trading at about $9 a share, giving Barnes and Noble a total market cap of $1.3 billion, which is still less than the Nook subsidiary itself.

  1. David Merkel Monday, April 30, 2012

    BKS should trade below the value of the Nook subsidiary; the rest of the business loses money consistently, and is up against stronger competition in AMZN.

    That said, they could unlock the value by spinning off Nook to shareholders… but why would management give up its only good asset simply to help shareholders?

    1. BKS is trading at twenty five dollars a share which makes it worth just shy of four point five billion dollars. No idea what the still to created Nook spin-off would be worth.

  2. Oscar Gonzalez aka @notagrouch Monday, April 30, 2012

    This might just be B&N saving grace. As much as I’m all for survival of the fittest, I also hate to see a century old company go out of business. I have a feeling that this boost is temporary, having worked there before, it is obvious that they struggle to innovate and keep ahead of the curve. Not sure if this is enough to light a fire under them and continue to improve.

  3. Either way looks like the stock price should be heading up with microsoft involved…


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