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Check Out Line: Showdown at the Barnes & Noble corral

September 28, 2010

barnes1Check out Barnes & Noble’s victory at its annual meeting.

Shareholders of the U.S. bookseller had to choose between dissident investor Ron Burkle and Chairman Len Riggio as a bitter proxy battle between the chain’s top two stakeholders came to a head.

And the winner of the “gunfight” was Barnes & Noble, whose slate of directors won election.

Burkle, whose Yucaipa Cos owns 18.8 percent of Barnes & Noble shares, had been on a slate of three nominees seeking seats on the board, including the one held by Riggio, the man who built the chain into the largest U.S. specialty bookseller and the company’s largest shareholder with a 28.2 percent stake. Three of the nine board seats were up for a vote.

Burkle also asked shareholders to modify an anti-takeover “poison pill” that Barnes & Noble put into place last year after Burkle doubled his stake. Burkle had accused Riggio of running the company for his personal benefit and leaving it saddled with debt and ill-prepared for the shift to electronic books.

Barnes & Noble, which put itself up for sale in August, had said Burkle is seeking control of the company without paying shareholders a premium and lacks a business plan of his own. Riggio has said he may make a bid to buy the company. After the shareholder vote, Burkle’s Yucaipa called on Riggio to support the highest bid in such a move.

Burkle received a boost last week when influential shareholder advisory firm Institutional Shareholder Services Inc backed Burkle’s slate of directors, but three other leading firms had sided with Barnes & Noble.

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(Reuters photo)

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