Barnes & Noble (NYSE: BKS) announced today that it will acquire Barnes & Noble College Booksellers -- an operator of book stores on college campuses -- for $596 million.

The hitch? Barnes & Noble College Booksellers is owned by Leonard Riggio, the chairman of Barnes Noble. In a press release announcing the deal, Barnes & Noble said that "Based on College's fiscal 2009 results, BKS would have realized incremental earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) of $115 million from acquired operations and assets. The transaction will also result in the elimination of BKS' annual royalty payments for online textbook sales, which amounted to $6 million in fiscal year 2008."

And what of the apparent conflict of interest? Don't worry: The company established a special committee to evaluate the proposed deal.

Normally a related party deal of this magnitude would sounds all kinds of alarm bells. But because it was already a partner company, it smells less bad. But still: In negotiating the deal, Mr. Riggio's loyalties had to have been divided. The special committee can ensure the fairness of the transaction, but it can't ensure that B&N paid the lowest possible price for the company. At some point Mr. Riggio was torn between his duties to B&N shareholders and his status as the owner of B&N College Booksellers. This is why related-party transactions are generally seen as something to be avoided.

"Last spring, CEO Leonard Riggio of Barnes & Noble (NYSE: BKS) purchased almost $50 million-worth of his company's stock between $27-29.50; today, it languishes on the remainder table at $17.56," says Mark Skousen.

In his income-oriented speciality service, High Income Alert, the advisor says, "Now, a billionaire has also taken a stake." Here's the advisor's update.

"Barnes & Noble is a worthy addition to our model portfolio. Trading well below the level that the CEO purchased shares, we consider the stock a bargain.

"Barnes & Noble owns the nation's largest chain of bookstores, with 800 stores in 50 states. It also owns one of the Web's most-visited Web sites, bn.com. Between its stores and Web site, Barnes and Noble sells more than 300 million books a year.