Barnes & Noble has bought Microsoft’s stake in the Nook business in preparation for a Nook business spin-off later in 2015. Just two years ago, Microsoft bought a 16.8% stake in the Nook business for $300 million. Many saw this as a bid by Microsoft to enter the electronic book reader and tablet market while gaining access to the retail market.
Since then the Nook business, while substantial, was not able to become profitable. As a consequence, Barnes & Noble wants to spin-off this business and concentrate on the book retail side.
According to the Wall Street Journal, estimates by John Tinker, an analyst with Maxim Group, Microsoft has invested about $500 million in Barnes & Noble so far and will get back around 25% of that. Reuters reports that Microsoft will also receive a 22.7% share of the eventual sale of the Nook digital business, if it is sold within the next three years. On the upside, the company will not have to pay future funding of the Nook business, which runs approximately $21 million per quarter.