Barnes & Noble for sale?

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MARK AUSTIN THOMAS: The holiday shopping season is upon us. Like many retailers, booksellers do a good business this time of year. Barnes & Noble is one of the biggest players in the field. Shares of that stock were up yesterday after an analyst suggested the company may be ripe for a leveraged buyout. Alisa Roth has more from New York.


ALISA ROTH: It's been a record year for private equity buyouts. So far, private equity firms have bought nearly a thousand companies in deals worth more than $300 billion.

Part of the surge is that private equity firms are swimming in money right now and looking for companies to buy.

There's speculation that Barnes & Noble is an attractive target. That's because it has little debt and generates billions in sales.

David Snow edits the trade publication Private Equity International. He says the scenario is a familiar one:

DAVID SNOW: One strategy that private equity firms use is they look for a company that has very strong cash flow, doesn't have much debt, maybe has cash on hand. They'll buy that company, leverage it up and return a lot of capital to their own shareholders.

Rumors about Barnes & Noble first popped up after a hedge fund bought significant stakes in the bookseller. But Barnes & Noble founder Len Riggio and his brother, CEO Stephen Riggio, still own more than a quarter of the company's shares, which means they'll have final say in any deal.

In New York, I'm Alisa Roth for Marketplace.

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