The Barnes & Noble annual meeting has been a quiet affair in recent years, but that was going to change when shareholder Ron Burkle said he was considering proposing an alternative slate to run for the board of directors, and interest in the meeting, set for September 28, has been heightened by the distinct possibility that Burkle and B&N chairman Len Riggio could be competing for ownership of the retailer. B&N’s recently released proxy statement, while giving the date for the meeting, does not list a time or place; traditionally the meeting has been held at B&N’s New York headquarters. The statement urges shareholders to vote for the company-backed nominees for the board, Len Riggio, Michael Del Guidice and Lawrence Zilavy, and against supporting any nominees supported by Burkle’s Yucaipa Companies, though Burkle has not yet put forth any candidates.
Just how sensitive the board vote could be is seen in a warning in the proxy against using any proxy card sent to shareholders by Yucaipa, even to vote against their nominee since any vote made on a Yucaipa card would overturn any vote a shareholder may have placed for the B&N slate.
The meeting and a possible fight over ownership would involve two camps with big stakes in B&N. Len Riggio personally owns just under 30% of B&N’s shares and all directors and officers own a total of 36.2%. Burkle owns 19.2% of the shares and Aletheia Research & Management 15.9%. It is not clear who Aletheia would support in contest between Riggio and Burkle.
The proxy also contains information on a few provisions that could make it a bit more expensive for an owner to acquire B&N in an unfriendly takeover. Four top executives-William Lynch, Steve Riggio, Joe Lombardi and Mitchell Klipper--are entitled to receive a total of nearly $28 million in cash severance payments if they are terminated following an acquisition of the company. Substantial equity awards would also be accelerated if the event of a change in control of the retailer.
