Say, what? Seattle M&A expert says Microsoft should buy Barnes & Noble

The Barnes & Noble in Bellevue, near Microsoft's HQ

We’ve heard a lot of wild M&A chatter to start off the new year, including Amazon.com’s reported interest in RIM. But here’s one of the more unusual head-scratchers.

Nat Burgess, president of Seattle area M&A shop Corum Group, recently appeared on CNBC and suggested that Microsoft should consider buying Barnes & Noble.

Now, forget for a moment that Barnes & Noble and Microsoft are locked in litigation over the use of the Android operating system in the electronic reading device, the Nook. And forget that Barnes & Noble operates more than 700 brick-and-mortar bookstores across the country.

Could something like this really take root?

In his remarks, Burgess admitted that the concept was a bit “outside the box.” But he then added that Apple has proven the power of a retail strategy. (Though Apple stores have nowhere

Nat Burgess

“Just a thought. But if Microsoft came in and picked up Barnes & Noble … they would have instant retail presence in all of the major malls in America,” said Burgess. “They would have a rapid base of readers. They could put Windows 8 in the next-generation Nook…. You asked me to talk about the deals I want to see.  Not the ones that are the most likely. But that could be a very interesting one.”

Maybe it’s not so far-fetched.

During Corum’s 2012 M&A Forecast today, Burgess brought up the idea again noting that he recently chatted with a friend at Microsoft about the retail concept. “He confirmed that the strategies behind such a deal are now in place, but I am not buying Barnes & Noble stock yet,” Burgess said.

Here are Burgess’ remarks from his appearance on CNBC a couple weeks ago. Interestingly, since then, Barnes & Noble has lost even more of its market value and announced that it was considering spinning off its Nook business unit.

Now, that could get really interesting if Microsoft jumped into the e-reader business as a direct rival to Seattle’s Amazon.com. It would also be an interesting way to avoid the Android litigation. Stranger things have happened.

  • Guest

    I think that could be a good idea, but what people are really buying are iPads. Much like Microsoft’s smartly-timed investment in Facebook back when it was only a $100 _M_illion company, I think Microsoft would be wise to invest in Apple. Apple’s really making the products that people like and its stock is trading at a pretty fair multiple.

    In conclusion, Microsoft should buy Apple. Not necessarily all of it, but enough to realize a good return on investment.

    • Guest

      Great way for Ballmer to get fired. “We’re being beaten so badly by those guys that we’ve decided to invest in their stock instead of our own”.

      They invested once before to keep Apple afloat and avoid a lawsuit. They got out shortly thereafter. That was something they could get away with. What you propose would get the CEO and board fired. So here’s hoping they attempt it.

  • Guest

    Galactic-ly stupid advice.  Even if B&N is a cheap buy atm (b/c it’s loosing a buck a share).  The last thing MS needs is more marginal businesses to distract it from the core of multi-screen OS, apps and enterprise SW/Services.  Would be the equivalent of WebTV with the added boat anchor of a bunch of retail sq. ft.  There’s either acquisition or bankruptcy in B&N’s future, but MS?  I think not.

  • http://twitter.com/burnaspidistra Steven

    It would be a great idea because it would also avoid a potential loss in the ongoing patient lawsuit.

    • Guest

      I think you mean “patent’ there, and there’s little reason to think that MS won’t prevail on some of it, as they did recently with Motorola. And should they lose on the current claims, they can add more at any time and try again.

  • http://www.facebook.com/profile.php?id=100000205344179 Mary Tee

    Yes, what a move for Microsoft!!!  Buying a print industry player.  The printed word–the next big thing!

  • Bobcat

    I think Microsoft could make some money buying just the Nook division, putting the Nook store front and center on all Windows 8 products (the way that Google Play and Apple stores sell ebooks) and (possibly) selling redesigned ereaders under that brand. The brick and mortar has value, but not to Mr. Softy.