Surprise! Burkle Says He Doesn't Want Control of Barnes & Noble
Yucaipa Companies sent a letter to Barnes & Noble shareholders that was filed with the SEC. The thrust of the letter is that the iron grip that Chairman Leonard Riggio's has on the company must be broken. The letter states, "This Board has approved years of related party transactions with the Riggio family." Those include payments to a shipping company in which the Riggio family has a 20% interest and about $500 million paid to Leonard Riggio and his wife when the parent company bought Barnes & Noble College Booksellers.
The letter devotes a long section under the upper-case heading "LEONARD RIGGIO SHOULD NOT GET SPECIAL TREATMENT." Burkle makes it clear he intends to strip the chairman of complete control of the bookseller.
Then, in a disarming section of the letter, it says "Barnes & Noble claims that Yucaipa and one of the Company's other major institutional investors, Aletheia Research & Management, are working together to "steal your company." That is absolutely FALSE!" The document also claims that the current "strategic review" of the company that may cause its sale could end up changing control of Barnes & Noble without getting shareholders a premium.
Burkle may indeed only want a profit on his investment. The Barnes & Noble stock has not moved much during the battle between the billionaire and the board. It trades at $15 now, well below its 52-week high of $25.07. Burkle appears to be willing to get a board in place that will control Riggio's activity and eventually leave Yucaipa with a substantial profit.