After Ron Burkle began looking for shareholders’ votes in his fight with Barnes & Noble yesterday, it was the retailer’s turn today. The company issued a revised proxy statement and sent letters to shareholders this morning that urged shareholders to vote for its slate of board nominees that, in addition to founder and chairman Len Riggio, include two new candidates, David Golden and Dr. David Wilson. The letter also asks shareholders to reject a Burkle proposal that it says will weaken B&N’s poison pill provisions, making an unfriendly takeover of the company possible.
In urging shareholders to vote for the company nominees, the letter charges that Burkle, in cooperation with Aletheia Research & Management, is trying to takeover B&N without paying a premium for the company. According to B&N, Burkle and Aletheia are trying the same strategy to gain control of B&N that they used to win control of A&P. “Burkle began his scheme by rapidly accumulating millions of Barnes & Noble shares at about the same time as another Los Angeles-area investment firm, Aletheia Research & Management. Yucaipa and Aletheia have a history of investing in many of the same companies at about the same time, including Whole Foods, Wild Oats and A&P. Burkle claims he is not working together with Aletheia to gain control of Barnes & Noble, but can you really believe that?,” the letter says, adding that Burkle and Alethia own over 60% of A&P stock.
The two now control about 35% of B&N compared to 33% owned by Riggio and other B&N insiders and B&N said its shareholders right plan is the only thing preventing Burkle and Aletheia from accumulating more shares in the bookstore chain. The letter notes that Burkle’s lawsuit challenging the legality of the poison pill was rejected by a Delaware court earlier this month.
The letter also questions the qualifications of Burkle and his two candidates, Stephen Bollenbach and Michael McQuary. “Burkle brings no relevant experience, no insight, no business plan, no strategy and no track record to Barnes & Noble,” the company said in the letter.
The new proxy materials do not provide a time and place for the annual meeting, although it is still set for September 28.
