Waterstones owner buys US bookstore Barnes & Noble

The owner of Waterstones has bought American bookstore chain Barnes & Noble in a £570 million deal which the British bookseller’s boss said will “counter Amazon’s siren call”.

Elliott Advisors said it had agreed to pay 683 million dollars (£573 million) for the company, which has 627 stores across all 50 US states.

James Daunt, chief executive of Waterstones, will be installed as boss of Barnes & Noble in addition to his current role, but the bookshop brands will continue to operate independently.

It follows a turnaround of Waterstones under Mr Daunt, driven by investment in the store estate and a focus on individual booksellers.

He said: “Our purpose is to create, by investment and old-fashioned bookselling skill, bookshops good enough to be a pleasure in their own right and to have no equal as a place in which to choose a book. We counter thereby Amazon’s siren call and defend the continued existence of real bookshops.”

Speaking to the Press Association, Mr Daunt added that Elliott’s financial backing would allow him to invest in Barnes & Noble’s store estate and “make them look a bit nicer”.

Barnes & Noble dwarfs its British counterpart, with more than double the number of stores. It generated revenue of 3.662 billion dollars (£2.87 billion) last year, compared with £402 million at Waterstones.

But the company said in October it was exploring a sale amid tough market conditions and competition from Amazon.

Last year it made a loss of 137.7 million dollars (£108 million) before tax.

Leonardo Riggio, founder and chairman of the company, said: “We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years.

“In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead.”

Elliott took control of Waterstones last year, buying a majority stake from Russian billionaire Alexander Mamut who rescued the chain from near-collapse in 2011.

Waterstones has since gone on to acquire fellow book retailer Foyles.