The battle between Barnes & Noble’s largest outside shareholder, Ron Burkle's Yucaipa Cos., and the nation’s largest bookselling company has moved to court with Burkle filing a lawsuit in a Delaware court over what Burkle claims is the poison pill B&N adopted to prevent him from acquiring a larger position in B&N. The shareholder’s rights plan, the suit says, creates a "slanted playing field" in favor of Len and Steve Riggio who together with other senior company executives control 32% of B&N’s stock. Burkle owns about 19% of the retailer’s stock and said he would like to acquire up to a 37% interest in the company, calling B&N’s share price undervalued.
In a prepared statement, B&N called Burkle’s action “a meritless lawsuit.” B&N plans to submit the rights plan to a shareholder vote before the end of November.
The lawsuit repeats many of the charges Burkle made in letters sent to B&N earlier this year. The rights plan is designed to prevent Yucaipa or others from mounting an effective proxy battle, the suit charges, and cements the control of the company in the hands of the Riggios, while disenfranchising other stockholders.
The suit sets up what should be an interest annual meeting set for some time in September at which Burkle plans to nominate three directors for B&N board.
