CHICAGO - Barnes & Noble Inc said on Wednesday that it would not waive its poison-pill anti-takeover provision to allow billionaire investor Ronald Burkle to nearly double his stake.
Barnes & Noble, the top brick-and-mortar U.S. bookstore chain, in a letter dismissed Burkle's request, as well as complaints about the company's corporate governance policies.
The board has determined by unanimous vote that acceding to your request would not be in the best interests of all Barnes & Noble's shareholders, the company said in the letter, a copy of which was included in a U.S. Securities and Exchange Commission filing.
Burkle's Yucaipa Cos LLC sent a letter to the company's board on Jan. 28, seeking permission to raise its stake to up to 37 percent without tripping the pill's provisions, which take effect once any investor tops 20 percent ownership.
Yucaipa bought 500,000 Barnes & Noble shares in January, raising its stake to 18.7 percent from 17.8 percent. It had earlier bought 5.7 million shares in quick succession in October and November, prompting Barnes & Noble's board, led by Chairman Leonard Riggio, to pass the poison pill in November.
A 37 percent stake would make Yucaipa the chain's largest shareholder, ahead of Riggio, who founded the company with a single bookstore in 1965.
The retailer's poison pill is designed to prevent hostile takeovers by allowing current shareholders to dilute a raider's holdings by purchasing more shares at a discount. It also allows existing Barnes & Noble shareholders to purchase a buyer's shares at a steep discount in case of a takeover. (Reporting by Ben Klayman; Editing by Lisa Von Ahn)