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Burkle, Barnes & Noble vie for votes in latest letters to shareholders

September 13, 2010 |  2:24 pm

In the increasingly contentious proxy fight between billionaire investor Ron Burkle and bookstore giant Barnes & Noble Inc., each side sent a letter to company shareholders Monday that urged them to vote against the other side.

Burkle’s Los Angeles-based investment firm Yucaipa Cos. and the bookstore chain have been verbally attacking each other for months after Burkle began rapidly buying up shares of Barnes & Noble late last year. Burkle now owns about 19% of the bookseller’s stock.

After losing a legal challenge to the company's “poison pill” plan, which seeks to prevent hostile takeovers, Burkle launched a proxy battle last month. He is seeking three seats -- one for himself -- on the company's board.

In Burkle’s latest letter -- which began, “Enough with the fiction” -- the supermarket magnate slammed the New York-based bookseller's management, saying it had devalued the company and “missed the boat” on the e-book trend. He also accused the bookseller's largest shareholder, Chairman Leonard Riggio, of self-serving deals.

“The Barnes & Noble board keeps trying to scare you with misleading statements about Yucaipa to distract you from the real issues,” the letter said. “Contrary to the board’s repeated misstatements, Yucaipa has no hidden agenda to take control of the company.”

Barnes & Noble, which has accused Burkle of seeking to take over the company without paying shareholders full value, fired back, saying Burkle held “an undistinguished track record of public company board service.”

“Mr. Burkle has a history of engaging in self-dealing transactions and exerting influence over companies in which Yucaipa has invested without paying a control premium,” Barnes & Noble's letter said. “In some instances, Mr. Burkle has sought to implement large-scale strategic changes at companies that later filed for bankruptcy or encountered severe financial distress.”

The company’s annual shareholder meeting is scheduled for Sept. 28.

Barnes & Noble shares rose 42 cents to $15.65. The stock is down about 18% year to date.

-- Andrea Chang

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