Barnes & Noble stock jumps after hedge fund discloses 12% stake

Barnes & Noble Inc. shares rose sharply after Jana Partners, a hedge fund that has pushed for companies to sell off assets, disclosed a 12% stake in the largest U.S. bookstore chain.

The New York-based retailer’s shares jumped 18% to $13.41.

Barnes & Noble is considering separating its growing Nook digital unit into a separate company so investors will give it the higher valuation of a technology business. In March the company hired a new chief financial officer, Michael Huseby, who helped spin off two units while at Cablevision Systems Corp. Jana has taken an activist role in publisher McGraw-Hill Cos., proposing a plan last August to break up the company.

“This increases the possibility of action,” said Michael Glickstein, chief investment officer of G Asset Management, a Barnes & Noble investor that has pushed for the company to spin off units. “Jana has experience in the publishing space, and a track record in finding value in breakup plays.”

The hedge fund is now the third-largest holder of Barnes & Noble stock, following founder and Chairman Leonard Riggio and Ron Burkle’s Yucaipa Cos., according to data compiled by Bloomberg.

Barnes & Noble put itself up for sale in 2010 following pressure from Burkle. The process ended with John Malone’s Liberty Media Corp. investing $204 million in Barnes & Noble in August 2011.

New York-based Jana Partners and Barnes & Noble did not comment.