Barnes & Noble investors choose Riggio over Burkle
NEW YORK (Reuters) - Barnes & Noble Inc Chairman Leonard Riggio narrowly beat down dissident investor Ron Burkle's attempt to join the top U.S. bookseller's board and said he would be soliciting interested buyers.
Preliminary results from Tuesday's annual shareholder meeting showed that holders of 44 percent of the shares eligible to be voted supported the slate chosen by Riggio, while 39 percent supported Burkle's slate, according to a source familiar with the results. The rest did not vote, or withheld their votes.
Barnes & Noble and Yucaipa confirmed the overall outcome, though the bookseller said certification of final results could take several days.
The vote resolves a bitter proxy war between the two billionaires but could weigh on Barnes & Noble's pursuit of a sale, first announced in August. Shares in the company fell more than 2 percent on Tuesday.
"Our job is to get a lot of other bidders interested," Riggio, the top Barnes & Noble shareholder with a 28.2 percent stake, told reporters after the shareholder meeting in New York.
Some 20 groups have or are expected to sign confidentiality agreements ahead of potential bids, with books on the company being sent out as of Tuesday, according to cable business channel CNBC.
Riggio said in the past he would look for partners to buy the company, but declined to elaborate on his current plans.
Riggio also said on Tuesday he did not want to engage with Burkle given the personal tone of the rhetoric during the proxy war.
Burkle, whose investment firm Yucaipa owns 18.8 percent of the company, seized on the results to say Riggio must conduct a transparent auction that delivers the best possible outcome for investors. Some investors and analysts say Burkle may tender his own bid.
"The best way he can support the Company's efforts to maximize stockholder value is a clear and unequivocal public commitment to support the highest bid for the Company, even if it is submitted by a third party, if he himself decides to make a bid," Burkle said.
NO GAME PLAN
Burkle has accused Riggio of running the top U.S. bookstore chain for his personal benefit and leaving it saddled with debt and ill-prepared for a shift to electronic books that has kept its sales in decline.
Burkle had the support of influential shareholder advisory firm Institutional Shareholder Services Inc, but never put forth a detailed business plan, earning the criticism of analysts and some shareholders.
Based in Los Angeles, Burkle did not attend the meeting.
"Burkle didn't have the courtesy to show up," said individual investor Howard Tannenbaum. "Riggio and his brother built up the company. What does Burkle know about book selling?"
Some 43 percent of shareholders also rejected Burkle's proposal to amend an anti-takeover "poison pill" put in place by the company in November after Yucaipa doubled its stake in a matter of days, the source familiar with the results said. About 39 percent supported the proposal.
The poison pill limits any shareholder, except for Riggio, who is grandfathered, from holding 20 percent or more of the company. Shareholders are set to vote in a special meeting on November 17 on whether to ratify the pill.
Burkle sought to raise the pill's trigger to 30 percent and is appealing a Delaware court ruling in August to uphold it.
Along with Riggio, outside directors David Golden, a partner in investment firm Revolution LLC, and David Wilson, chief executive of the nonprofit organization that runs the Graduate Management Admission Test were elected to the board for three-year terms.
(Editing by Lisa Von Ahn, Maureen Bavdek and Gunna Dickson)