Following a proxy battle that has cost millions of dollars and featured blistering charges and countercharges, the vote for three Barnes & Noble directors will be tallied tomorrow at the retailer’s annual meeting set to begin at 9 a.m. at the Asia Society in New York City. The vast majority of votes will have been cast well before the meeting is held and Ron Burkle’s Yucaipa Cos. urged shareholders to make sure they voted their gold proxy cards by midnight tonight.
The get out-the-vote message accompanied a last appeal from Burkle to dump the Len Riggio-led slate in favor of the alternative slate led by Burkle himself. The letter struck at familiar themes—that the B&N board has served as a rubber-stamp for Riggio’s family interest, and that Len Riggio has put those interests above what is best for all shareholders. The letter warned that the strategic review of B&N that could result in the sale of the company could be compromised unless his three nominees are elected, arguing that Riggio could make a “lowball” offer for the company and then block any other bids. “Without our presence on the Board,” the letter states “we think it could be Leonard’s deal or no deal; the same old business as usual and the same old “trust us” by the Board when they ask you to believe they can deliver performance to match what we believe are overly optimistic “hockey stick” projections. Or will it will be more of the same old related party transactions—selling the Company to the Riggio family on the cheap? These are choices we believe might be good for Leonard Riggio and his family, but not for the rest of the Company’s stockholders.”
In order to make sure that any offer made for B&N is best for all shareholders, the letter states that it is critical to vote for the Yucaipa candidates. “We believe Yucaipa’s nominees to the Board have the experience and perspective necessary to meaningfully contribute to the strategic review process, and their presence on the Board can reassure other stockholders and potential bidders who may be in a position to present a value-maximizing transaction proposal that the process is truly independent and fair,” the letter says.
In its rebuttal to Burkle, B&N said the B&N special committee is made up of four independent board members (something the Delaware Chancery Court agreed with) and that “numerous potential bidders are already participating in the strategic alternatives review process.” Yucaipa’s Ron Burkle “is trying to subvert this independent process by installing two hand-picked representatives on the Special Committee, each of whom he is paying $100,000.,” B&N said. The company, which has said that Burkle is trying to take over the company without paying a premium, added that in its proxy statement, Burkle states that if elected to the board, “Stephen F. Bollenbach and Michael S. McQuary should immediately be appointed to the Strategic Alternatives Special Committee.” This is proof, B&N said “that Mr. Burkle’s real objective is to gain control of Barnes & Noble without paying shareholders a premium.”
