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John Malone Reveals Reasoning Behind $1 Billion Barnes & Noble Bid

May 24, 2011  •  Post A Comment

Liberty Media Chairman John Malone, addressing shareholders Monday in Denver, explained the reasoning behind the company’s buyout big for Barnes & Noble, which valued the company at $1 billion, Adweek reported.

Malone sees a big future for B&N’s Nook e-reader and expects publishers to get on board as they become increasingly uneasy with the market dominance of Amazon’s rival Kindle. Barnes & Noble has just unveiled a smaller, lower-cost Nook as it positions itself to try to obtain a larger share of the growing e-book market, Bloomberg reported.

The new Nook, priced at $139, has a 6-inch display and weighs in 35% lighter than the original version, which Barnes & Noble rolled out in October 2009. The Nook currently has about 25% of the U.S. e-book market, trailing only Amazon’s Kindle.

In a general sense, Malone sees Barnes & Noble as undervalued, Adweek reported. He had a similar sense about Sirius XM when Liberty acquired a 40% stake in the company for $530 million–a stake now worth more than $5 billion, according to the report.

“You might look at the experience we’ve had with Sirius XM,” Malone told the shareholders as he talked about the bid for Barnes & Noble. He added that he expects to hear back from the B&N board with a decision on the bid in “months, if not weeks.”

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