The Company's Shares Have Lost Close to 40% of Their Value Since Bay Capital's First All-Cash Acquisition Offer
Severely Disappointed by the Board's Refusal to Engage and Brazen Entrenchment Efforts, Including the Rejection of Bay Capital's Recent Nomination of Five Highly-Qualified Director Candidates
Commences Delaware Lawsuit to Enjoin the Board's Activities Aimed at Disenfranchising its Stockholders and Preserving its Owns Board Positions
Urges the Board to Immediately Engage in Good Faith Discussions Regarding Bay Capital's Latest 35% Premium, All-Cash $4.50 Per Share Proposal
MENLO PARK, Calif., July 15, 2019 /PRNewswire/ -- Bay Capital Finance, LLC, a Menlo Park-based investment firm ("Bay Capital" or, "we"), announced today that it has sent a letter to the Board of Directors (the "Board") of Barnes & Noble Education, Inc. ("BNED" or, the "Company") (BNED) expressing its extreme disappointment with the Company's continued rejection of Bay Capital's series of attempts since early February to engage in discussions regarding offers to acquire BNED for a substantial all-cash premium. Bay Capital also announced that it recently nominated a slate of five highly qualified director candidates, four of whom are completely independent of Bay Capital, for election at the Company's 2019 Annual Meeting. BNED has rejected Bay Capital's nominations on the grounds that Bay Capital was not a stockholder of record as of June 27, 2019, which BNED claims was the nomination deadline. However, BNED's proxy statements for its past three Annual Meetings have included false and misleading information regarding the deadlines for shareholder proposals and nominations, as well as incorrect information regarding the voting standard for director elections. Bay Capital has filed a lawsuit in Delaware to enjoin any attempt by BNED to disenfranchise stockholders with respect to Bay Capital's nominations and to ensure that stockholders have an opportunity to have their voices heard on whether they prefer a sale now at a premium or the value-destroying status quo under the current Board at the upcoming 2019 Annual Meeting.
Sunil Suri, Managing Partner and Principal of Bay Capital, commented, "We are perplexed by the Company's refusal to privately engage in good faith negotiations with us regarding several proposals we have made over the past six months to acquire all of the Company's outstanding equity at a significant premium—a highly compelling value proposition for stockholders. Even more puzzling is the Company's rationale that 'it is not in the best interests of BNED and its stockholders to pursue such proposal because Bay Capital's proposal 'fails to recognize the value of BNED's digital transformation strategy to position the business to drive long-term growth.' BNED's shares have lost 40% of their value since we delivered our first acquisition offer in early February. It is certainly not in the best interests of the Company's stockholders for the Board to continue to abdicate its responsibilities and fiduciary duties in pursuit of a risky 'digital transformation' while stockholder value deteriorates so precipitously. Had the Board simply acted in good faith and entered into discussions with us back in early February around our first acquisition proposal, BNED's stockholders could have enjoyed a significant premium to the then-$5.63 share price for their investment by now. Instead, they are now sitting with a share price in the low-to-mid $3 per share range and a Board that seems more intent on preserving its own positions than taking steps to maximize value for its stockholders. The prolonged and persistent destruction in the Company's share price since our first proposal is a stinging indictment of the Board and its rationale for rebuffing our attempts to engage. It is truly unfortunate that after submitting three separate offers to the Board, each of which was summarily rejected, we are now also being disenfranchised and must resort to court action to preserve our rights and the rights of the Company's stockholders to elect new Board members."
Mr. Suri continued, "In our letter to the Company on June 27, 2019, Bay Capital has proposed to acquire all of the outstanding shares of common stock of the Company for $4.50 per share in cash, a premium of more than 35% of the preceding ten day volume weighted average share price. This offer represents a significant premium and is an attractive opportunity to lock-in certain value for stockholders before even more value is squandered under the current Board's watch. In sum, we believe our proposal is a far superior alternative to the ongoing value destruction under the current Board, and we are prepared to both complete our due diligence and close such a transaction with no financing contingency within 90 days of being granted access to the Company."
Mr. Suri concluded, "It's time for BNED's Board to stop blocking opportunities for its stockholders to maximize the value of their investment and engage with Bay Capital. We are prepared to immediately dedicate the necessary resources to quickly negotiate a definitive merger agreement and consummate a transaction if we can find a willing partner in BNED. We are deeply concerned for the sustenance of this power legacy brand and believe that our fellow shareholders share our concern. We believe stockholders will agree with our approach to protect and maximize the value of their investment, and that they will think twice before entrusting the future of the Company to this Board."
About Bay Capital
Bay Capital Finance, LLC ("Bay Capital") is a private investment fund with hundreds of millions of dollars in assets under management comprising holdings in securities, real estate, operating companies and other asset categories. Founded and managed by Sunil Suri, Bay Capital seeks to opportunistically deploy its capital and apply its investment management expertise to undervalued assets and asset categories with an aim toward long term value creation. Headquartered in Menlo Park, California, Bay Capital has offices in Los Angeles and New York.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Bay Capital Finance, LLC, together with the other participants named herein (collectively, the "Bay Capital Group"), intends to file a preliminary proxy statement and an accompanying WHITE proxy card with the Securities and Exchange Commission ("SEC") to be used to solicit votes for the election of its slate of director nominees at the 2019 annual meeting of stockholders of Barnes & Noble Education, Inc., a Delaware corporation ("BNED" or the "Company").
THE BAY CAPITAL GROUP STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A WHITE PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE.
The participants in the proxy solicitation are expected to include Bay Capital Finance, LLC and Sunil Suri (collectively, the "Participants").
As of the date hereof, Bay Capital Finance, LLC directly beneficially owned 25,000 shares of Common Stock, $0.01 par value (the "Common Stock") of the Company. Mr. Suri, as the Principal and Managing Member of Bay Capital, may be deemed to beneficially own the 25,000 shares of Common Stock owned directly by Bay Capital.
WARNING REGARDING FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS. FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY USE OF WORDS SUCH AS "OUTLOOK", "BELIEVE", "INTEND", "EXPECT", "POTENTIAL", "WILL", "MAY", "SHOULD", "ESTIMATE", "ANTICIPATE", AND DERIVATIVES OR NEGATIVES OF SUCH WORDS OR SIMILAR WORDS. FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE ARE BASED UPON PRESENT BELIEFS OR EXPECTATIONS. HOWEVER, FORWARD LOOKING STATEMENTS AND THEIR IMPLICATIONS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR AS A RESULT OF VARIOUS RISKS, REASONS AND UNCERTAINTIES. EXCEPT AS REQUIRED BY LAW, BAY CAPITAL FINANCE, LLC AND ITS AFFILIATES AND RELATED PERSONS UNDERTAKE NO OBLIGATION TO UPDATE ANY FORWARD LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.
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