Banres & Noble rejects bid by L.A. billionaire Ron Burkle to raise his stake in retailer

Barnes & Noble rejects Burkle’s bid to raise stake

NEW YORK — Barnes & Noble has rejected a request by major shareholder and Los Angeles billionaire Ron Burkle to raise his stake in the book retailer without triggering its shareholder-rights plan.

Barnes & Noble’s shareholder rights plan adopted last year limits new stakes by a single investor or group to 20 percent without board approval. It also limited holders who already held more than 20 percent from buying more stock.

A shareholder rights plan, or “poison pill,” is generally implemented to deter hostile takeovers. Under the plan companies typically give shareholders the rights to buy new shares that will dilute the value of existing stock if a hostile buyout is attempted.

Earlier this month, Burkle had sent a letter to the bookseller seeking to acquire up to a 37 percent stake in the company without triggering the plan. Currently, Burkle and his Yucaipa Cos. own about 19 percent of the company’s shares.

According to a filing with the SEC, Barnes & Noble sent a letter to Burkle Wednesday stating that it would not be in the best interest of its shareholders to let him to acquire more shares without triggering the shareholder rights plan.

Yucaipa Cos. did not return a call for comment.

Burkle, who made much of his fortune in supermarkets, is also known for a failed bid to acquire the Tribune Co., as well as for his role as a major political fundraiser. He has said that Barnes & Noble shares are undervalued.

Barnes & Noble has seen sales slump as it faces tough competition from online retailers and discounters. Last month it lowered its fiscal third-quarter guidance due to weaker-than-expected sales over the holidays.

Shares rose 55 cents, or 2.6 percent, to $21.75 during midday trading.