Barnes & Noble Settles With Burkle–To What End?

Failing bookstore company Barnes & Noble BKS, maker of the also-ran e-reader, the Nook, has settled with raider Ron Burkle, who bought enough shares in the company so that he could claim that he needed a board seat. The Wall Street Journal reports that “As part of the settlement, Barnes & Noble will add two independent directors to the board, in addition to a director affiliated with Yucaipa Cos., the investment firm run by Mr. Burkle, these people said.” Burkle believed that the founding Riggio family, which holds a controlling interest in the firm, would act in their interests and not those of other shareholders. Burkle will end his proxy fight against the company in exchange for those board seats and support the re-election of chairman Leonard Riggio. Apparently, Barnes & Noble will pay the raider’s legal costs for his challenge. It is hard to imagine why this is a good deal for shareholders who will watch Burkle pick the company’s pocket in exchange for a seat at the table. Riggio is already acting in his best interests and those of Burkle as well by putting the book company up for sale. Riggio has indicated that he may be a buyer, probably with a private equity firm which could borrow most of the purchase price from unwitting banks which have already lost tens of billions of dollars on LBOs. Barnes & Noble has been thrashed by Amazon.com AMZN which has sold books online for more than a decade and does not have the costs of maintaining store locations To read the rest, head over to 247WallStreet.com