Bookseller Barnes & Noble hit back at billionaire Ron Burkle’s attempts to wrest control of the company on Wednesday.
The company urged investors to reject Burkle and two of his allies in their bid to get seats on Barnes & Noble’s board of directors. In a letter to shareholders, the company said the billionaire was trying to take over the company without paying a premium for its stock.
“Burkle and his designees have provided no strategic vision and offered no plan for the Company’s future,” the letter reads. “We believe Burkle’s slate, if elected, would work to advance his interests and not the interests of all Barnes & Noble shareholders.”
Burkle’s 18.8 percent stake in Barnes & Noble make him its second-largest shareholder. Under his current proposal, Burkle would be entitled to buy up to 30 percent of the company’s shares. Earlier this year, Barnes & Noble adopted a poison-pill defense requiring board approval for anyone whose stake rises above 20 percent.
A spokesperson for Burkle did not respond to requests for comment.
Burkle and his allies were nominated by his investment firm Yucaipa and had hoped to be seated at the board’s Sept. 28 meeting. Leonard Riggio, the company’s chairman, is also up for re-election. In its letter to shareholders, Barnes & Noble throw its weight behind Riggio’s candidacy.
The company also said that Burkle’s slate of candidates had a series of embarrassing business missteps in their background. In particular, Barnes & Noble wrote, Burkle’s fellow candidate, Stephen Bollenbach, served on the Time Warner board when it approved the catastrophic merger with AOL
“While Burkle claims his nominees offer independence, you should ask yourself whether they will be beholden to him. Each is being paid $100,000 simply to run on his slate – and each has other connections to Burkle,” the letter reads. “In addition, we believe the Burkle slate does not have the experience necessary to build value at Barnes & Noble.”
On Tuesday, Barnes & Noble reported grim quarterly results. In addition to cratering store sales, the company said it had spent a great deal on legal costs associated with Burkle’s proxy fight. The company reported a loss of $62.5 million, or $1.12 a share, compared with a profit of $12.3 million, or 21 cents a share, in the same quarter a year ago.
Burkle’s efforts to buy another high profile brand, Miramax, collapsed over disagreements about the studio's price earlier this year.