Following the news that Yacaipa Companies, controlled by Ronald Burkle, has doubled its stake in Barnes & Noble to some 18.3% this month (Shelf Awareness, November 16, 2009), the company reacted by adopting a 'poison pill' provision. The "stockholder rights plan" allows current stockholders to buy a new series of preferred stock if "a person or group, without board approval, acquires 20% or more of Barnes & Noble's common stock or announces a tender offer which results in the ownership of 20% or more of Barnes & Noble's common stock. The rights also will be exercisable if a person or group that already owns 20% or more of Barnes & Noble common stock, without board approval, acquires any additional shares (other than pursuant to Barnes & Noble's compensation or benefit plans)."
Under the plan, stockholders "other than the person triggering the rights" will be able to buy B&N common stock at a 50% discount. The plan expires in three years and will be put to a shareholder vote in the next year.
B&N stated that the board adopted the plan "in response to the recent rapid accumulation of a significant portion of Barnes & Noble's outstanding common stock. The rights plan is intended to protect the company and its stockholders from efforts to obtain control of the company that are inconsistent with the best interests of the company and its stockholders."
Yacaipa has said that it is "concerned with the adequacy and enforcement of the company's corporate governance policies and practices, as evidenced in part by the recent acquisition of Barnes & Noble College Booksellers," which was owned by B&N chairman Len Riggio, who, with a 28% stake, is the single-largest shareholder of B&N.