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Activist shareholder to challenge court ruling at Barnes & Noble

US activist investor Ron Burkle shows no signs of giving up his efforts to gain greater control of bookseller Barnes & Noble when he announced that he is appealing a court decision involving control of the family-controlled company.

In August, a court in Delaware ruled against Burkle's legal attempt to have the poison pill provision removed, which allows the founding Riggio family to remain as the company's largest shareholders with 34% of shares.

Burkle owns 19% of Barnes & Noble through Yucaipa Companies, the investment firm he founded in 1986, making him the second-largest shareholder. The poison pill provision prevents any shareholder other than the Riggio family from taking a greater than 20% stake.

In a recent statement, Burkle attempted to prove that by acquiring a greater stake, he is not a threat to the New York-based bookseller. "The only threat shareholders should be worried about is Leonard Riggio's ever-tightening grip on the company," he said.

The disagreement over the poison pill provision will come to a head later this month at the company's annual general meeting, where Burkle is attempting to elect three independent directors to the company board, including himself. He has also submitted a notice for shareholders to vote to change the provision to allow greater outside share ownership. 

Burkle is unhappy with the drop in Barnes & Noble share price, for which he blames the management of the founding family. His case is likely to have been strengthened by the company's most recent financial results, when Barnes & Noble reported a net loss of $63 million (€49 million) for the quarter ending 31 July. (Continue reading here)

Barnes & Noble's share price has come under considerable pressure in recent years because of competition from online bookstores including Amazon and new technology such as digital books and e-readers. Its share price has dropped 25% in the last year and stood at $16.10 on 2 September. 

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