Liberty Media to Sell Most of Its Stake in Barnes & Noble

Nearly three years ago, Liberty Media wanted to buy all of Barnes & Noble, before settling for a big stake. Now it appears that the media conglomerate has had enough.

Liberty announced on Thursday that it would divest the vast majority of its stake in the struggling bookseller through private sales of its holdings. But it added that it would hold onto 10 percent of its initial $204 million investment, which gave it a roughly 17 percent stake.

Investors were disappointment by the move and the stock slid more than 10 percent on Thursday morning, trading at around $19.79 a share.

The sale removes one of Barnes & Noble’s major backers as the company tries to navigate the changing landscape for books and media. Its Nook business, once considered its brightest hope, has instead sputtered, with sales dropping more than 50 percent in the most recent fiscal quarter from a year ago.

Its traditional bookstores have remained more stable, though core comparable store sales are drifting downward.

Now Liberty has all but sold its bet on Barnes & Noble. Perhaps it isn’t surprising: the media concern’s chairman, John C. Malone, once admitted that its move was a bit of an outlier for his company.

“It would be a bit of a flier for us, on whether or not Barnes & Noble can play competitively with the likes of Apple and Amazon in the digital transformation,” he told DealBook at the Allen & Company media conference in July of 2011, before his conglomerate agreed to invest in the bookseller.

Both Liberty and Barnes & Noble described the move on Thursday as one that would give the embattled retailer more room to plot its future. When the stock sales close on Tuesday, Liberty will lose the right to keep two representatives on the Barnes & Noble board. Greg Maffei, the conglomerate’s chief executive, will step down, though Mark Carleton, a senior vice president, will stay on as a director.

“By reducing our preferred position and eliminating some of our related rights, Barnes & Noble will gain greater flexibility to accomplish their strategic objectives,” Mr. Maffei said in a statement.

Leonard Riggio, Barnes & Noble’s chairman, added that while Liberty has been a strong supporter of the retailer, the company will now have a greater ability to pursue unstated “various strategic options.”

Other investors in the bookseller were much less sanguine about the move. Shares in Barnes & Noble dropped nearly 10 percent in early-morning trading, to $19.95 each.