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DealBook: What Might Have Been, and the Fall of Lehman

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Disruptions: Rather Than Time, Computers Might Become Panacea to Hurt

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DealBook: What Barnes & Noble’s Retail Arm Might Be Worth

Though Leonard S. Riggio has sought to push Barnes & Noble into the future by supporting its Nook e-reader business, the bookseller’s chairman has long held a soft spot for the retailer’s brick-and-mortar outlets.

Now that he is planning to bid for those stores, how much will he pay? According to some analysts, maybe not all that much.

Shares of Barnes & Noble rose on Monday after Mr. Riggio formally disclosed his plans, rising 8.9 percent by midmorning, to $14.80. That values the overall company at about $863 million. Its total enterprise value is nearly $1.3 billion, according to Standard & Poor’s Capital IQ.

But by some measures, that means the physical stores and BarnesandNoble.com are worth virtually nothing. Microsoft and Pearson collectively bought a stake of roughly 23 percent in the Nook division last year, valuing it at close to $1.8 billion.

Clearly, Barnes & Noble’s board is not going to part with the company’s 689 outlets and online merchant operations for nothing.

David Schick, an analyst with Stifel, estimated in a research note on Monday that the retail operations were worth about $484.5 million. That is based on a multiple of 0.1 times trailing 12 months’ revenue, the same used in an attempted buyout of the smaller competitor Books-A-Million last year.

Mr. Schick added that he believed his estimate to be a conservative figure.

But James McQuivey, an analyst at Forrester Research, argued that Barnes & Noble had little ability to command a top-drawer price for its legacy businesses. The physical stores will continue to face the challenges bedeviling a vast array of retailers, with the Barnes & Noble name carrying weight for a declining number of people.

“Making a bet on bookstores now, when we don’t know what the ultimate footprint of those stores will be, will require getting a really great price,” Mr. McQuivey told DealBook in an interview.

DealBook: Concerns Mount That Investors Might Balk at Debt Buyback in Greece

John Kolesidis/ReutersThe offices of Greece’s finance and development ministries in Athens.

LONDON — The hedge funds holding Greek bonds may have become too greedy for their own good.

It’s just two days before the books close on a plan to reduce Greece’s debt load by having the country purchase its deeply discounted bonds from banks and investors. But bankers close to the transaction are voicing concerns that hedge funds might “blow up the deal” by holding out for a higher price.

If the buyback fails, they say, the consequences would be severe. Not only could the International Monetary Fund refuse to lend more money to Greece, but wealthy European countries, already skeptical about extending yet another round of loans to Greece, could withdraw their support. In that case, the 40 billion euro-plus lifeline that the country needs to remain solvent would be in jeopardy.

“People have fallen in love with their profits, and they have lost touch with the downside,” said Petros Christodoulou, a top executive at the National Bank of Greece who presided over the 100 billion euro private sector debt restructuring earlier this year as head of Greece’s debt management agency. “If this thing fails, there is total collapse, and the price goes to 20 cents.”

On Monday, Greece surprised the market by offering, in effect, to repurchase as much as 30 billion euros worth of bonds at an average price of 32 to 34 cents on the euro. That represents a roughly 5 percent premium to where the bonds were trading at the end of the previous week.

Having borrowed 10 billion euros, the net debt relief would be around 20 billion euros. European officials feel that would be enough to satisfy the I.M.F.’s demand that Greece try to bring its debt level below 110 percent of its gross domestic product by 2022.

But numerous hedge funds — many of which scooped up Greek bonds in the mid-teens this summer and are now sitting on fat profits — are telling Greece that they may not participate in the buyback. Instead, they are betting that the participation of Greek banks and short-term investors looking for a quick profit will be enough to get the deal done. In theory, the strategy would allow the hedge funds to cash out at prices of 40 cents and beyond when bonds rally in the aftermath.

Buying Greek bonds on the cheap has become one of the more popular trades of late in Europe. Hedge funds like Third Point, Brevan Howard, Greylock and others have accumulated significant amounts of the debt.

With the voluntary buyback deal in question, bankers are contemplating the use of sophisticated legal stratagems that could force investors to sell out at much lower prices.

One possibility would be for the government to buy back as much debt as it can at current prices. Then Greece would come back with another lower offer; as long as two thirds of investors agree to the deal, collective action clauses would kick in, forcing reluctant investors to accept the government’s terms. Reaching that percentage would be easier, bankers say, as this time more of the bonds would be in friendly hands and would vote accept the offer.

Legal experts have also pointed out potential loopholes in the contracts of the restructured bonds that would — if push came to shove — allow Greece to keep current on its bond payments to European governments while forcing private sector creditors to take a loss.

In a further reminder of Greece’s tenuous financial position, Standard and Poor’s lowered its rating for Greek debt to selective default in a response to the buyback action. The rating agency said that when the buyback is finished, Greece’s rating would return to its higher CCC level. Any move, however, by the country to deploy more forceful measures l would most likely result in Greek bonds keeping a selective default rating.

“I am shocked that hedge funds are taking this so lightly,” said a person with knowledge of the buyback discussions who spoke on condition of anonymity. “There is an 80 percent chance that the I.M.F. will walk if this deal does not work — these guys have become their own worst enemy.”

In a deal this sensitive and crucial, there is always a fair amount of chest puffing as opposite sides push for the best possible outcome. The threat by hedge funds to not participate may well be a bluff to force Greece to up its price. Greece, on the other hand, has little to gain by forcing a bad deal on foreign investors at a time when it is relying on them to drive the privatization process.

But, as in all games of chicken, the risk of collision — or, in this case, a botched deal that results in Greece not getting its desperately needed money — is never all that far away.

As Madoff Money Is Distributed, Mets Owners Wonder What Might Have Been

Under better circumstances, the owners of the Mets would have an extra $67.3 million in their bank accounts today, money that could help their losing team after another miserable season.

Keep up with the latest news on The Times's baseball blog.

But these are not ordinary times. Fred Wilpon and Saul Katz will not get that $67.3 million or another $94.7 million that they once had reason to expect stemming from losses in 50 of their nearly 500 accounts with Bernard L. Madoff. Those accounts were called “net losers.”

They agreed not to receive the money last March as part of the settlement of a federal case filed by the trustee for Madoff’s victims under which they agreed to repay $162 million in fictitious profits they had withdrawn from other accounts with Madoff between 2002 and 2008.

According to the trustee’s Web site, two distributions totaling $67.3 million were made Friday to the fund that will repay customers who were defrauded by Madoff. The trustee, Irving H. Picard, did not say how long it would take to recover the remaining $94.7 million.

The Mets’ owners, of course, could use the money themselves to rebuild the team. They are heavily in debt. They lost $70 million during the 2011 season. And while they reduced player payroll by about $50 million this season and raised $200 million from outside investors, Citi Field attendance fell again, pushing overall revenue down. Another loss is expected.

Wilpon and Katz might still get some compensation from their Madoff losses, which totaled $178 million. If Picard collects all $162 million, they would get $16 million. But if Picard does not collect all of it within three years, Wilpon and Katz could be liable for up to $29 million.

The trustee’s announcement about recoveries in the Wilpon-Katz case came a week after he said that nearly $2.5 billionwas distributed to eligible Madoff customers, bringing to $3.6 billion the total paid to customers with allowable fraud claims. At the time, David J. Sheehan, Picard’s chief counsel, said in a statement, “In addition to recovering as much stolen money as possible for Madoff’s victims, we are also moving aggressively to resolve litigation and appeals which are delaying further distributions.” Picard has recovered, or reached deals to recover, about $9.15 billion, or 53 percent of the estimated $17.3 billion principal lost in Madoff’s fraud.