Microsoft’s deal with Barnes & Noble is now kaput.
In 2012, Microsoft dropped $300M for a 17 percent stake in Barnes & Noble’s somewhat promising Nook business. Today, the companies announced in a filing with the SEC that Microsoft will sell back its stake for “$62,425,006.63 in cash and 2,737,290 shares of common stock.”
Barnes & Noble detailed its rationale within its fiscal second quarter 2015 earnings report, explaining that “Barnes & Noble and Microsoft have agreed to terminate their commercial agreement including any associated obligations for international content acquisition and sale. Such termination will allow the Company to continue its rationalization of the NOOK Digital business and enhances Barnes & Noble’s operational and strategic flexibility. The termination also relieves Microsoft of any obligation to continue to fund support and other payments set forth in the commercial agreement between the partners.”
In other words, Microsoft is out and now Barnes & Noble has more flexibility to spin-off its Nook business — something it might do “by the end of August 2015,” Barnes and Noble says.