The world's biggest bookstore chain is suffering from a chronic decline in sales and shrinking cash flow that could put off new financial partners.
Barnes & Noble said on Tuesday it was reviewing strategic alternatives, including a possible sale.
Founder and top shareholder Leonard Riggio, whose family has run the company as its business waned, wants partners for a bid. But he has yet to get backers, according to a source familiar with the matter.
A number of private equity firms are interested in taking a look at the bookseller, including names such as Bain Capital, Apollo Management LP APOLO.UL, TPG Capital LP TPG.UL and others, sources familiar with the matter told Reuters. But how their interest might be reconciled with Riggio's 29.9 percent stake was unclear.
Further complicating the picture, billionaire investor Ron Burkle holds more than 19 percent of the company and has made it clear in regulatory filings and a lawsuit that he believes Barnes & Noble has been mismanaged.
Burkle accumulated much of his stake when the company's shares traded in a range of $19 to $22, including a purchase as recently as May.
The shares closed on Wednesday at $15.31, including a 19 percent surge on news of the possible sale, suggesting buying Burkle's position would be pricey.
On the flip side, should Burkle want to pursue control, he will have a hard time convincing Riggio to step aside.
"I don't think there is going to be whole lot of interest aside from perhaps Burkle or Riggio. It could be the two of them bidding against each other," said Standard & Poor's Michael Souers. "Riggio is too attached to this business to want to sell out."
One retail investment banker described the nascent auction as a party where no one will show up.