John Malone is closing the book on his Barnes & Noble Inc. ambitions.

Liberty Media Corp., the billionaire’s holding company, announced plans today to sell most of its stake in the long- struggling bookstore chain and abandon one of its seats on the board. Liberty will hold on to about a 10th of its initial investment, according to the statement. The move sent shares of Barnes &Noble down almost 14 percent.

Liberty offered to buy Barnes & Noble in 2011 for about $1 billion, spurring speculation that a takeover battle would emerge. Instead, Liberty dropped the bid, opting to acquire $204 million in preferred Barnes& Noble shares that could be converted into a 17 percent stake. Since then, some investors had been hoping Liberty would increase the size of its investment, not shrink it, said John Tinker, an analyst at Maxim Group in New York.

“This was a surprise,” he said in an interview. “The question has always been: Liberty doesn’t own a lot -- are they going to buy more? It takes away that aspect of the story.”

Today’s move puts pressure on Barnes & Noble to find new allies. The New York-based company has suffered from three years of losses, hurt by online competition and the costly rollout of its Nook electronic-book reader. Liberty’s decision gives Barnes & Noble “greater flexibility to pursue various strategic options,” the bookseller’s chairman, Leonard Riggio, said in the statement.

 

Stock Drop

 

Barnes & Noble fell to $19.12 at the close in New York, the biggest one-day decline since June. Before today’s drop, the stock had climbed 48 percent this year.

Malone, who has a personal net worth of about $6.8 billion, has been turning his focus to the U.S. cable industry. He acquired a stake last year in Charter Communications Inc. and bid unsuccessfully for Time Warner Cable Inc. this year. Liberty’s sprawling investments also include Sirius XM Holdings Inc. and the Atlanta Braves baseball team.

Liberty’s sale of its stake to “qualified institutional buyers” will be completed on April 8, the company said. As of yesterday’s close, 17 percent of Barnes & Noble was worth about $225 million. That represents a gain of about 10 percent over what Liberty paid.

 

Board Changes

 

Liberty Chief Executive Officer Greg Maffei will step down from Barnes & Noble’s board when the transaction is completed. A Liberty senior vice president, Mark Carleton, will remain a director of Barnes & Noble.

The bookseller has been cutting costs in its Nook tablet division as it weighs whether to separate the digital business from its retail stores. A turnaround effort by CEO Mike Huseby showed signs of gaining steam in February when the company posted a quarterly profit. Still, sales fell 10 percent to $2 billion in the period.

Tinker said today’s move doesn’t change his buy recommendation on Barnes & Noble’s stock. Liberty only had a couple hundred million tied up in the company, a small amount for the media giant, he said. And Malone may have just concluded that Barnes & Noble didn’t fit with the rest of his business.

“They’re saying, ‘Look, it’s a bookstore. We’re a media company,’” he said.