Retailers, consumers and prices
Check Out Line: Choice words in Barnes & Noble saga
Check out some of the smack talk from documents and statements made yesterday in the ongoing Barnes & Noble saga.
First, some of the basics.
Billionaire and boldfaced name Ron Burkle owns 19.2 percent of Barnes & Noble and wants to take it over. But standing in his way is Len Riggio, the chairman and the guy who built it into the largest U.S. bookstore chain, who owns nearly 30 percent (he’s the top shareholder, ahead of Burkle) and put in an anti-Burkle poison pill last year. The two have some bad feelings going way further back than this.
They have differed over how to manage Barnes & Noble with Burkle saying in not so many words that Riggio was crooked and running the chain into the ground.
And then yesterday, full on war broke out. Barnes & Noble said in the morning that talks with Burkle were off. Then a judge upheld the anti-Burkle poison pill. And the coup de grâce: Burkle launched his proxy battle.
Here, a few choice quotes from an oh-so-busy day in this story on Thursday.
“At bottom, Yucaipa (Burkle’s investment company) is simply positing an absurd scenario, at best fit for a discussion by a Red Bull fueled group of nerdy second year law school corporate law junkies, who find themselves dateless (big surprise) on yet another Saturday night.” – Vice Chancellor Leo Strine, Delaware Chancery Court, in upholding the poison pill.
“The company’s poor stock performance is an indictment of Chairman Leonard Riggio’s controlling influence on the Board of Directors and reflects a failure of leadership.” Burkle said in a filing with the U.S. Securities and Exchange Commission. (Shares are down by nearly half since last year.)
“Yucaipa believes the incumbent Board is rife with business and personal conflicts and historically has been a rubber stamp for the Riggio family’s interests.”
“Barnes & Noble and Yucaipa were unable to conclude an agreement on mutually acceptable terms.” Barnes & Noble’s one-line statement on Thursday morning.
Okay, so it was not a snarky statement but it was terse and did not even include a gentler “have been unable” or are “continuing.” This was a please go away and die message.
Stay tuned to see if Burkle lines up the directors he wants and wins over other shareholders. There’s an annual shareholder meeting later next month, so there are quite a few installments of this soap opera yet to come.
Also in the basket:
Penney profit beats but outlook weak; shares dip