An acquisition could help both, but would a tieup of the U.S.'s two biggest booksellers be able to win FTC approval?Barnes & Noble (BKS), the giant bookseller built through acquisition, may be on the verge of its biggest deal yet as it weighs bidding for top competitor Borders Group (BGP). Analysts say the deal could bolster Barnes & Nobles' bottom line at a price tag, including debt, of well over $1 billion.
Investors are left wondering whether a combination of the top two national book chains could pass antitrust muster. Former government regulators say the question will come down to just how national the book market has become. The growth of Amazon.com (AMZN) and booming book sales by big-box retailers such as Wal-Mart Stores (WMT) and Target (TGT) could provide enough cover to let the once unimaginable deal gain approval.
"There may be a lot of complaining but at the end of the day, it's highly unlikely it would be enough to block it," says Michael McFalls, an attorney at Jones Day in Washington, D.C., who worked at the Federal Trade Commission from 1997 to 2000. Of course, if the FTC turned up damning e-mails or other troubling evidence, all bets would be off, he says. The commission tried to block Whole Foods Market's (WFMI) deal to buy Wild Oats, for example, after finding statements from Whole Foods' CEO about avoiding "nasty price wars." A federal court eventually let the deal go through.
Read More
