Institutional Shareholder Services (ISS) a major proxy-advisory firm, has recommended that shareholders in Barnes & Noble vote for the dissident slate backed by Yucaipa Cos. in the ongoing proxy fight.
B&N holds its annual meeting a week from today. Each of the other three major proxy-advisory firms, Glass Lewis, PROXY Governance, and Egan-Jones, has come down on the management's side.
This is in accord with the developing pattern. The folks at ISS are more likely to back insurgents than their colleagues.
In this case, ISS says: "Barnes & Noble’s history of poor performance, analysts’ lack of confidence in management’s ability to achieve its targets, corporate governance concerns regarding the company’s employment relationships with Leonard and Stephen Riggio, concerns about the independence of the current board, and questions over the rationale for the 2009 acquisition of Barnes & Noble College Booksellers from Chairman Leonard Riggio."
The book selling business is in the midst of a major transformation, and B&N has tried to keep ahead of the curve, bring out its Nook to compete with Amazon's Kindle and the other eReaders on the market for example. B&N has been increasingly aggressive over the last year in using its bricks-and-mortar stores to push the eReader on shoppers. That sounds a bit odd: "Buy this, and you'll never have to come here again!" -- but such is the transition to a digital age. Or to whatever the heck we are all heading for.
But some are skeptical of whether they really are out in front. Goldman Sachs, in a late-August report, said: "Results fell short of our forecast and, more importantly, reduced visibility on objectives going forward, given two factors: (1) Additional disclosure revealed surprisingly low gross profit margins for the .com business, reflecting both sharp, structural margin cuts in the traditional (physical) .com realm, and poor underlying profitability of the digital business in aggregate (Nook + ebooks). (2) Soft superstore sales, as results missed guidance issued two thirds of the way through the July quarter."
Showing posts with label Barnes and Noble. Show all posts
Showing posts with label Barnes and Noble. Show all posts
Wednesday, September 22, 2010
Monday, August 16, 2010
Barnes & Noble settlement talks
Settlement talks between the parties in the fight over the famous bookstore chain seemed promising early last week. Talks went late into the night on Wednesday. But by week's end, things had fallen apart.
In a brief statement B&N said that it and Yucaipa "were unable to conclude an agreement on mutually acceptable terms."
Yucaipa is an investment company alter ego for Ron Burkle. According to scuttlement, a tentative deal had emerged in which B&N would expand the size of its board of directors by three seats and let Burkle name directors to the new seats. In return, Burkle would support the candidates director nominees for this meeting and the next. He would also stop litigating to try to have B&N's poison pill plan invalidated, thereby allowing B&N to continue in effect to limit the size of his investment in their company.
On Thursday, that tentative agreement unravelled. The parties communicated that to the chancery court in Delaware, and that court issued its ruling on the pending motion to dismiss. Barnes & Noble won the litigation -- or at least this round of it -- in a ruling by Judge Leo Strine.
The "rights plan" a/k/a the poison pill, by the way, provides that if an outside acquires 20 percent or more of the company's stock, other investors get to buy common shares at a 50 percent discount. So Burkle can only pass the 20 percent threshold if he is willing to accept enormous dilution in stock value thereafter.
"The defendants have shown that their adoption and use of the rights plan was a good, fair, reasonable response to a threat to Barnes & Noble and its stockholders," Strine said, dismissing Burkle's lawsuit.
The name of the decision is: Yucaipa American Alliance Fund II LP v. Riggio, CA5465, Delaware Chancery Court.
In a brief statement B&N said that it and Yucaipa "were unable to conclude an agreement on mutually acceptable terms."
Yucaipa is an investment company alter ego for Ron Burkle. According to scuttlement, a tentative deal had emerged in which B&N would expand the size of its board of directors by three seats and let Burkle name directors to the new seats. In return, Burkle would support the candidates director nominees for this meeting and the next. He would also stop litigating to try to have B&N's poison pill plan invalidated, thereby allowing B&N to continue in effect to limit the size of his investment in their company.
On Thursday, that tentative agreement unravelled. The parties communicated that to the chancery court in Delaware, and that court issued its ruling on the pending motion to dismiss. Barnes & Noble won the litigation -- or at least this round of it -- in a ruling by Judge Leo Strine.
The "rights plan" a/k/a the poison pill, by the way, provides that if an outside acquires 20 percent or more of the company's stock, other investors get to buy common shares at a 50 percent discount. So Burkle can only pass the 20 percent threshold if he is willing to accept enormous dilution in stock value thereafter.
"The defendants have shown that their adoption and use of the rights plan was a good, fair, reasonable response to a threat to Barnes & Noble and its stockholders," Strine said, dismissing Burkle's lawsuit.
The name of the decision is: Yucaipa American Alliance Fund II LP v. Riggio, CA5465, Delaware Chancery Court.
Tuesday, July 20, 2010
Barnes & Noble trial
I'll just linkfarm today.
The trial in the Barnes & Noble poison pill case is underway.
Corporate managers aren't usually eager to pick fights with their second-largest shareholder. But of course nothing is business-as-usual that involves Ron Burkle, the adversary-shareholder in question.
Burkle, the "grocery billionaire" who shows up in stories about the Clinton family, had enough juice to get Jared Paul Stern fired from the Post back in 2006. But, it seems, not quite enough juice to have Stern to get him prosecuted.
That Jared is not to be confused with this guy.
Anyway, the present excitement concerns Barnes & Noble, in a trial before Chancery Court Judge Leo Strine.
Burkle claims that certain directors are engaged in a “self-dealing scheme designed to entrench the Riggio family.”
Go at it, Rock'em, Sock'em robots!
The trial in the Barnes & Noble poison pill case is underway.
Corporate managers aren't usually eager to pick fights with their second-largest shareholder. But of course nothing is business-as-usual that involves Ron Burkle, the adversary-shareholder in question.
Burkle, the "grocery billionaire" who shows up in stories about the Clinton family, had enough juice to get Jared Paul Stern fired from the Post back in 2006. But, it seems, not quite enough juice to have Stern to get him prosecuted.
That Jared is not to be confused with this guy.
Anyway, the present excitement concerns Barnes & Noble, in a trial before Chancery Court Judge Leo Strine.
Burkle claims that certain directors are engaged in a “self-dealing scheme designed to entrench the Riggio family.”
Go at it, Rock'em, Sock'em robots!
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