Barnes & Noble Likely to Limit Shareholder Stakes Amid Proxy Battle
Barnes & Noble Inc. (BKS) may enact limitations on the size of any single shareholder's stake in the bookseller, as the family of founder and chairman Leonard Riggio and activist shareholder Ron Burkle battle for control of the company.
The company on Nov. 17 will hold a vote at a shareholder meeting to determine whether to enforce a so-called "poison pill" that would necessitate board approval for anyone who hopes to hold more than a 20% share of the company. Riggio currently own roughly a 30% stake in the company, while Burkle has about 19%.
"We believe that further unchecked accumulation of stock could put shareholders at risk, and we continue to believe the Rights Plan is a critical protection for your investment in Barnes & Noble," Barnes & Noble's board of directors wrote in a note to shareholders Thursday.
Barnes & Noble said in August that the company swung to a $62.5 million loss for the quarter ended July 31 from a profit of $12.2 million a year earlier, as higher overall expenses and, specifically, legal costs related to Burke's shareholder battles with the company, more than offset a 21% increase in revenue. The company also said at the time that legal costs for the year ending April 2011 would be about 25 cents a share.