Barnes & Noble unable to reach settlement with Burkle

New York City Barnes & Noble said Thursday it has not reached a settlement with billionaire investor Ron Burkle's Yucaipa Cos. The announcement followed on the heels of various reports that the two companies were close to a deal.

“Barnes & Noble and Yucaipa were unable to conclude an agreement on mutually acceptable terms,” Barnes & Noble said Thursday in a statement.

On late Wednesday, the Wall Street Journal and The New York Times both reported the two were close to a settlement agreement so Barnes & Noble could avoid a costly proxy fight and concentrate on selling off the company.

Burkle, who owns a 19% stake in the bookseller, is suing the company in an effort to expand his stake without triggering its poison pill. The collapse of the deal leaves Barnes & Noble open to a messy fight with one of its largest shareholders at a time when the company is trying to sell itself. In early August, the retailer said it was considering strategic alternatives, including a possible sale of the company, to boost stockholder value.

Burkle has indicated that he wants to wage a proxy contest to elect three new directors and would like time to buy more voting shares before a Monday deadline if the judge rules in his favor, The New York Times reported. If the two sides do eventually come to an agreement, Burkle would end his bid to gain more control over the book seller.

Burkle has challenged Barnes & Noble's poison pill strategy, which prevents anyone from taking more than a 20% stake in the company without board approval. He believes the strategy creates an unfair playing field that favors the controlling Riggio family, which owns more than 30% of the chain’s common stock.

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