Monday, October 23, 2006

Pershing Square Raises Stake in Barnes & Noble (BKS) to 8% According to Barron's

Although no 13D has been filed yet, Pershing Square, an activist hedge fund run by Bill Ackman, told Barron's that it has recently increased its stake in Barnes & Noble (NYSE: BKS) from 2.3% to 8%. Ackman said he thinks the stock could jump as much as 50% in the next 18 months and perhaps double over the next three years.

Shares of BKS are up 4.5% following the weekend article which hinted that the company may be the target of a takeover.

The article concluded that the company is being eyed by private equity investors since the share price has been held under pressure by concerns over growth prospects and regulatory issues (stock option practices). However, the company has impressive cash generation which may be the main reason the company is attracting potential suitors.

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