New York City According to an SEC filing on Monday, Barnes & Noble’s single largest outside investor is pushing to up his stake in the retailer.
Los Angeles billionaire Ron Burkle, who with his Yucaipa Cos. owns about 19% of Barnes & Noble shares, is seeking to acquire up to a 37% stake in the company.
The move is not currently permitted by the company's shareholder rights plan.
Shortly after Burkle boosted his stake to 19%, Barnes & Noble instituted a shareholder-rights plan last November limiting new stakes by a single investor or group to 20% without board approval. It also limited holders who already held more than 20% from buying more stock.
Often termed a “poison pill,” the plan is generally implemented to circumvent hostile takeovers.
In a letter to Barnes & Noble's board on Thursday, which was reported in the SEC filing, Burkle complained that the company has a different set of rules for Riggio family members and outside stakeholders.
Burkle and group’s 19% interest in the retailer is second to Barnes & Noble chairman Leonard Riggio, who owns a 29% stake.
Burkle wrote that the Riggio family and other company insiders hold 37% of the outstanding stock, and that combines with the 20% limitation on other stockholders makes any proxy contest unfair.
"This has the effect of placing de facto control of the company in the Riggio's hands, despite their owning much less than a majority of the company's shares," Burkle wrote.
He requested that he and his funds be allowed to acquire up to 37% of shares, collectively, to be on "equal footing" with the Riggio family at the company's annual shareholder meeting.
Barnes & Noble has issued no comment on the letter.