(Reuters) – Elliott Management is the lead bidder in an auction for Barnes & Noble Inc, the Wall Street Journal reported on Thursday, sending its shares up as much as 28%.

A deal between the activist hedge fund and bookseller could be reached in the coming days, the report said, adding that should Elliott win the bid, James Daunt, chief executive officer of Waterstones, would head Barnes & Noble.

Elliott bought the British bookshop chain last year.

Last October, Barnes & Noble said it was exploring different options after several parties, including founder-chairman Leonard Riggio, showed interest in acquiring the company.

New York-based Barnes & Noble has been struggling with declining sales for years as consumers increasingly shift to online.

The company has been locked in a legal dispute with its former Chief Executive Officer Demos Parneros after he was fired, partly because of allegations that he sexually harassed a female employee and attempted to “sabotage” a potential sale.

Parneros has rejected Barnes & Noble’s accusations.

Both Elliott and Barnes & Noble did not immediately respond to Reuters requests for comment.

Barnes & Noble, which has more than 600 stores and had a market capitalization of about $336 million as of Wednesday’s close, were last up 23.1% at $5.65.

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