Bloomberg BusinessWeek profiled Ron Burkle, head of Yucaipa Cos. and owner of 18.7% of Barnes & Noble stock. Burkle is currently at odds with the bookseller's board, which has enacted a poison pill provision limiting outsiders' investments to 20% of stock.
Burkle, who is personally worth $3.2 billion, according to Forbes, has a history of buying large interests in companies that are doing well enough so that it's unlikely he'll take a loss on his investment while promising enough to make a very nice return. Sometimes he influences company policy; sometimes he takes over direction of the company. He sees plenty of opportunity in B&N.
"Before investing in Barnes & Noble," the magazine wrote, "Burkle and his team asked publishers, book agents, consumers, and tech companies the same question: In the era of the e-book, what good is a bookstore? What Burkle learned was that Barnes & Noble has a deep and abiding relationship with its customers and could do a lot more to exploit it."
In his first letter to B&N chairman Len Riggio, Burkle related, "I said, 'You've had such a successful career, you've made so much money. Don't do the college book deal.' "
This referred to B&N's purchase of B&N College, which had been a separate company owned by the Riggios. B&N did make the purchase and then adopted the poison-pill provision.
Burkle's most recent letter to B&N was to ask for a meeting with non-management members of the board, i.e., not the Riggios (Shelf Awareness, February 28, 2010).
Lloyd Greif, head of investment banking firm Greif & Co., commented: "Barnes & Noble is in contempt of Ron, and that's not a good offense to commit. Most folks live to regret that."