Elliott Investment Management, the hedge fund owning Waterstones and Barnes & Noble, is reportedly exploring a public listing for the booksellers.
The fund has engaged with potential advisers regarding an initial public offering (IPO), with London reportedly preferred over New York.
No final decisions have been made, and plans could change, according to reports.
The company’s financial year ends in April, meaning an IPO would likely not occur before summer 2026, although investment bankers could be appointed earlier.
Elliott declined to comment, while Barnes & Noble and Waterstones were also approached for statements.
Together, the two chains operate over 600 stores in the US and more than 300 in the UK.
Much of their commercial success has been attributed to James Daunt, CEO of both booksellers and owner of his independent UK book chain.
Daunt has led Waterstones since 2011, successfully competing with Amazon and acquiring rivals including Foyles and Blackwells.
Speaking this month, Daunt described an IPO as an “inevitability,” suggesting it may be preferable to being sold to another private equity owner.
He said: “It feels like an inevitability and probably better than being flipped to the next private equity person.”
Elliott acquired Waterstones in 2018 from Russian billionaire Alexander Mamut and purchased Barnes & Noble in 2019 for $683m (£510m).
Based in New York, Elliott is known for aggressive shareholder activism and has sought influence over major global companies.
Its UK presence includes investments in the food chain Wasabi, and a failed bid to acquire electronics retailer Currys.
Elliott has also been involved in corporate governance pressure on BP, which recently replaced its chief executive less than two years into his tenure.
A public listing of Waterstones and Barnes & Noble would provide a boost to the UK stock market, which has struggled to attract major IPOs in recent years.
The move would also mark a high-profile return to the public markets for well-known retail names.
