Barnes & Noble Accuses Burkle of 'Corporate Failures' in Proxy
Barnes & Noble Inc. urged investors to reject Ron Burkle’s board nominees, accusing the billionaire and his proposed slate of participating in “some of the most spectacular technology and corporate failures in history.”
Shareholders should back Barnes & Noble’s three candidates, including Chairman Leonard Riggio, according to a statement from the New York-based bookseller. The company mailed the final version of its proxy statement to investors today. Burkle’s Yucaipa Cos. nominated him and two others for board seats.
Burkle served on the Yahoo! Inc. board that failed to accept takeover offers from Microsoft Corp., “possibly the biggest missed opportunity in the history of technology M&A,” Barnes & Noble said. Nominee Stephen Bollenbach also was a director at Time Warner Inc. when it approved a combination with AOL, hurting the media company’s value, the bookseller said.
“This is nothing more than a thinly veiled effort by Barnes & Noble to deflect criticism of this board’s failures,” Yucaipa spokesman Mike Sitrick said in an e-mailed statement. The track records of the nominees speak for themselves, he said.
The vote on the board seats is scheduled for next month. Barnes & Noble adopted a plan to prevent unwanted takeovers, a so-called poison pill, in November after Burkle said his stake rose to 17 percent. The plan discourages any holder from acquiring more than 20 percent of the company without board support. Under pressure from Burkle, the bookseller said this month that it’s examining a possible sale and that Riggio, its largest shareholder, may be a bidder.
A settlement to give Burkle board seats fell apart Aug. 12, according to people familiar with the situation. A few hours after the agreement failed, a Delaware judge ruled for Barnes & Noble and upheld the pill in a lawsuit brought by Yucaipa. Burkle filed a preliminary proxy later that day.
Barnes & Noble’s stock decline over the past year shows a failure of Riggio’s leadership, Yucaipa said in the proxy. The Los Angeles-based investment firm called the slump “an indictment of Leonard Riggio’s significant influence on the board.”
Barnes & Noble rose 63 cents, or 4.3 percent, to $15.29 at 4:01 p.m. in New York Stock Exchange composite trading. The shares have lost 20 percent this year.
Riggio and other insiders control about 36 percent of the company’s shares. Burkle has 19 percent.
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