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May 20, 2011 2:30 PM

Baker Botts, Cravath Take Lead on Liberty Media's Barnes & Noble Bid

Posted by Tom Huddleston Jr.

UPDATE: 5/23/11 at 12:30 p.m. EDT: The names of additional lawyers from O'Melveny & Myers, representing Leonard Riggio, have been added to the fifth paragraph below.

Entertainment conglomerate Liberty Media Corporation announced a proposal Thursday night that it is prepared to pay $17 per share to acquire New York–based Barnes & Noble, Inc., The New York Times reports.

Liberty Media's all-cash bid--which represents a 20 percent premium over Thursday's closing price for Barnes & Noble shares--values the world's largest bookseller at $1.02 billion, according to the Times. In its own announcement, Barnes & Noble said that Englewood, Colo.–based Liberty Media's bid is subject to the signing of an agreement, closing conditions and approvals, and the participation of Barnes & Noble founding chairman, Leonard Riggio.

Under the Liberty Media proposal's terms, Riggio would continue to have a role in managing Barnes & Noble and would retain an equity ownership stake worth some 30 percent of the company, with Liberty Media (through its Liberty Capital subsidiary) owning the remaining 70 percen, according to Bloomberg.

Cravath, Swaine & Moore corporate partners Scott Barshay and Andrew Thompson are serving as counsel to Barnes & Noble on the proposed transaction. Both also advised the company during a proxy contest in September that resulted in Riggio's reelection to the company's board. Barnes & Noble's general counsel is Gene DeFelice.

A special committee of Barnes & Noble's board of directors is being advised by Delaware firm Morris, Nichols, Arsht & Tunnell. Meanwhile, Riggio has hired O'Melveny & Myers M&A partner Paul Scrivano and litigation partner Charles "Chuck" Bachman as counsel.

Liberty Media is run by former TCI chairman John Malone and owns interests in such brands as QVC, Backcountry.com, and Starz. The group is being represented in this instance by longtime counsel Baker Botts. The firm has worked on a variety of past transactions, including it's $7.9 billion purchase of an ownership stake in QVC in 2003, and a $530 million investment in Sirius XM Radio Inc., in 2009.

Baker Botts's New York–based team includes corporate partners Frederick "Buzz" McGrath, Renee Wilm, Robert Murray, Jonathan Gordon, and John Winter. Litigation partner Richard Harper is also on the deal, and partner Robert Maier is advising on intellectual property matters.

Liberty Media's general counsel is Charles Tanabe.

Riggio said after Liberty Media announced its bid that he is "willing and eager" to stay with Barnes & Noble, according to the Times. The company has announced that it will unveil a new e-reader on Tuesday to complement its Nook and Nook Color e-book products.

The proposal also comes just a few months after Barnes & Noble's former chief rival, Borders, filed for Chapter 11, and turned to Kasowitz, Benson, Torres & Friedman for help with its restructuring efforts.

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