Is Apple Interested In Purchasing Barnes & Noble?

Wall Street Analyst doesn't think deal makes sense

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Would it make sense for Apple to purchase Barnes & Noble, the nations largest book retailer? If you read into Internet gossip, and you know you do, this is the rumor of the moment. It appears the rumor started over at BGR where an “unproven source claiming to have knowledge of discussions within Apple to possibly purchase Barnes & Noble.

If you step back for a second and look at the situation, it kind of makes sense. If a deal did get done, this would give Apple access to Barnes & Noble’s ever expanding library of digital books for their own iBooks. In turn this would also allow Apple to discontinue the NOOK, which is an iPad competitor (and I use that term lightly). The acquisition would also give Apple access to convert some of their brick and mortar locations into Apple stores, which would help with their aggressive push into the retail setting.

Sure the rumored asking price for Barnes & Noble might seem steep, ranging from anywhere between $1 billion to $1.5 billion, but Apple has $76 billion in cash laying around, according to AppleInsider.

The deal does make sense just thinking about it, but some don’t think the deal makes much sense for Apple. Brian Marshall, with Gleacher & Company, wrote to investors on Thursday that he doesn’t think Apple will target Barnes & Noble.

Marshall also went on to say that spending over $1 billion dollars on Barnes & Noble would not be a wise use of Apple’s money. AI has more from Marshall, “We would much prefer to see AAPL use cash for strategic purposes and balance sheet optimization (e.g., acquisition of content rights, dividend initiation, share repurchases, etc.)“.

Is Apple Interested In Purchasing Barnes & Noble?
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  • Kevin

    Being a huge fan of both brands, I think this would be a great marriage. Apple could bring it’s design flair and what’s-next know-how to make BN a 21st century bookstore, while Apple would gain access to a massive library of books. In addition, I could see Apple working with publishers to set up a sort of iTunes Match for books. Each book in BN could have a unique code (other than ISBN, which would be easily “pirated”) that would allow the consumer to match that book on the iBookstore for free. This would probably be an easier route than convincing all book publishers to include unique book codes on every book in every online/retail store in the world.

  • Torsten Adair

    1) Apple has the same access to e-books that B&N has: the publishers. Yes, there is some exclusive content, but Apple can create that quite easily by contracting with book publishers.

    2) If B&N stores are converted into Apple Stores, then Apple Stores lose their glamour if they can be found in every city. Apple can negotiate better leases by itself, instead of acquiring many leases which would be not so lucrative if they acquire B&N. (And it would cost Apple to break less-lucrative leases.) If you are a shopping center company, would you rather lease to Apple or Barnes & Noble? Which makes your center more of a destination? Which gives it more luxury glamour? Which makes it “cool” to teens with disposable income?

    3) If Apple wanted to buy a bookstore chain, why not Borders? Much cheaper (even with the large debt), a crappy e-reader… Heck, why not buy one of the music chains which went belly up? Because Apple can retail better from the web! (iTunes killed the record store. iBooks will help to do the same with bookstores.)

    4) What would Apple do with the college bookstores? Turn them into Apple stores? Run them as bookstores? Flip it to another company? (Unlikely, the two other big college chains are having financial difficulty.)

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