Barnes & Noble surges after activist investor urges company to sell itself in letter evoking Cicero and Thomas Jefferson

Activist investor Sandell Asset Management Corp on Tuesday urged U.S. bookstore chain operator Barnes & Noble Inc to sell itself.

Sandell, which said it had accumulated a "meaningful" stake in Barnes & Noble, said the company could fetch a price of $12 per share or possibly higher in a "go-private" deal.

In a letter that evoked some of history's famous wordsmiths, Sandell said the company's "current approximately $520 million market value of Barnes & Noble is unconscionably low."

From the letter:

As you are Board members of a retailer whose existence depends on people's quest for knowledge, we trust you may be familiar with some of the following comments:

"A room without books is like a body without a soul" - Cicero

"When I get a little money I buy books; and if any is left I buy food and clothes" - Erasmus

"I cannot live without books" - Thomas Jefferson

"I guess there are never enough books" - John Steinbeck

"Only in books do we learn what's really going on" - Kurt Vonnegut

We believe that millions of readers in the United States share - to varying degrees - the sentiments expressed in the above quotations."

Sandell said Barnes & Noble was the only "truly national bookstore chain" set to thrive with a brick-and-mortar model even as ecommerce gains more traction.

"It has become clear to us that all of the Company's stakeholders would be better served if Barnes & Noble were operated as a private company or as a division within a larger company, which would allow management to focus 100% of its attention on the Company's underlying operations," the letter said.

Shares of Barnes & Noble, which had a market value of $514.8 million as of Monday, were up 11% at $7.85 in early trading.

(Reuters editing by Sai Sachin Ravikumar)