Barnes & Noble Education, Inc. (NYSE:BNED) shares are trading lower after it announced a short-term shareholder rights plan and a new equity investment.

In particular, the company inked a definitive deal with Immersion Corporation (NASDAQ:IMMR) and existing shareholders and strategic partners regarding new equity and refinancing transactions to boost long-term financial position.

After closing the transactions in June 2024, Barnes & Noble will receive $95 million of new capital through a $50 million equity investment and a $45 million fully backstopped equity rights offering led by immersion.

The deal is projected to infuse net cash proceeds after transaction costs of about $75 million.

Also, the company plans to eliminate about $34 million of debt through equitization of second lien term loans, reflecting the strong support of key strategic partners.

Barnes & Noble has received commitments to refinance its existing asset-backed loan facility, which provides access to a $325 million facility maturing in 2028.

Apart from this, the board of directors approved adopting a short-term stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding common share.

The rights will be exercisable only if a person or group acquires 10% or more of the company's common shares and each right will entitle stockholders to buy one one-thousandth of a share of a new series of junior participating preferred stock at an exercise price of $5.00.

Investors can gain exposure to the stock via IShares Microcap ETF (NYSE:IWC) and Invesco FTSE RAFI US 1500 Small Mid ETF (NASDAQ:PRFZ).

BNED Price Action: Barnes & Noble Education shares are down 68.91% at 0.22 cents at publication Tuesday.

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