BASKING RIDGE, N.J. - Barnes & Noble Education, Inc. (NYSE: BNED), a prominent provider of educational solutions, announced the initiation of a stockholder rights plan approved by its Board of Directors. The plan includes a dividend distribution of one preferred share purchase right for each outstanding common stock share, effective April 29, 2024.
The rights plan is designed to be activated if an individual or group acquires 10% or more of the company's common stock, with certain exceptions. These rights allow stockholders, excluding the acquiring person or group, to purchase a fraction of a share of a new series of junior participating preferred stock for $5.00. If the 10% threshold is crossed, each right will enable the holder to buy several common 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 any 10% ownership is reached. Additionally, after the 10% mark is surpassed, the Board may exchange one common stock share for each outstanding right, rendering the rights of the acquiring party void.
Derivative positions that create synthetic interests in securities are treated as beneficial ownership of the common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares are held by counterparties to the derivatives contracts.
The rights, which are not taxable to stockholders, are set to expire on January 31, 2025, unless they are redeemed or exchanged beforehand. The details of the rights plan will be outlined in a Form 8-K filed with the Securities and Exchange Commission.
Legal counsel for the company is provided by Paul Hastings LLP, and Houlihan Lokey (NYSE:HLI), Inc. serves as financial advisor.
This announcement is based on a press release statement.
InvestingPro Insights
As Barnes & Noble Education, Inc. (BNED) implements its stockholder rights plan, investors are closely monitoring the company's financial metrics and market performance. InvestingPro 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 in the market. This is coupled with a Price / 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 attractive entry point for value investors, as highlighted by one of the InvestingPro Tips, which points out that BNED is trading at a low Price / Book multiple.
Despite challenges, BNED has seen a revenue growth of 3.05% over the last twelve months as of Q3 2024, suggesting some operational progress amidst the broader market context. The company's stock price has experienced significant volatility, with a 15.89% return over the last month, contrasting with a 53.12% decline over the last year. This high price volatility is also underscored by another InvestingPro Tip, which cautions investors about the stock's generally high price volatility.
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