--Pearson to own 78.2% of Barnes & Noble's digital business
unit
--Microsoft to retain 16.8% stake in NOOK Media
--Pearson has option to purchase additional 5% stake
By Melodie Warner
Publishing and education company Pearson PLC (PSO, PSON.LN)
agreed to invest $89.5 million for a 5% stake in Barnes & Noble
Inc.'s (BKS) digital business unit, NOOK Media LLC.
Bookstore operator Barnes & Noble will now own 78.2% of NOOK
Media and Microsoft Corp. (MSFT), which made a $300 million
investment earlier this year, will own 16.8%.
Pearson will also earn the option to purchase up to an
additional 5% interest in NOOK Media, subject to certain
conditions.
Barnes & Noble said the investment will improve customer
access to digital content by pairing Pearson's online-learning
expertise with NOOK Media's digital content and services.
"We formed NOOK Media to be a leader in the exploding market for
digital content," said Barnes & Noble Chief Executive William
Lynch. "Pearson is a forward thinking company similarly focused on
reading and learning, with powerful assets and a terrific
management team."
The bookselling industry has been in transition as readers are
drawn to a growing array of digital devices. The Nook e-reader is
in a highly competitive--and expensive--battle with tablets from
Apple Inc. (AAPL), Google Inc. (GOOG) and Amazon.com Inc.
(AMZN).
Barnes & Noble reported last month it swung to a fiscal
second-quarter profit amid strong sales of Nook-related content.
But total sales slid 0.4% as the consumer bookstore division's
revenue declined.
Shares of Barnes & Noble were up 4.5% at $15.00 in early
trading. Pearson's American depositary shares were down 0.5%at
$19.28.
--Tapan Panchal contributed to this article.
Write to Melodie Warner at melodie.warner@dowjones.com
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