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Barnes and Noble for sale?
- Thread starter ewomack
- Start date
Lincoln Rhyme
New Member
So, Is Barnes& noble going to have a clearance sell or not? And if so,how long will it last?
Hugh
Member
The fight for control of Barnes and Noble
http://finance.yahoo.com/news/The-S...9.html?x=0&sec=topStories&pos=6&asset=&ccode=
MICHAEL J. DE LA MERCED, On Monday September 20, 2010, 2:41 am EDT
By MICHAEL J. de la MERCED
Leonard S. Riggio, the pugnacious Barnes & Noble chairman, may be in the fight of his career, but he says he doesn't relish it.
"I find it almost repulsive I have to be put in a position to defend myself," Mr. Riggio said last week in Barnes & Noble's corporate offices, leaning forward to press his point. "I don't want to consume myself with not liking people."
Just over a week before Barnes & Noble shareholders convene for their annual meeting, Mr. Riggio remains locked in battle with the billionaire investor Ronald W. Burkle over three board seats, including Mr. Riggio's. And Barnes & Noble has begun seeking potential buyers for the entire 1,350-store chain.
Mr. Riggio, 69, lights up when talking about walking into physical bookstores or building up his company's digital one. It is his vision for the company that is at the center of the increasingly fierce proxy fight, one that began last month and in which both sides have recently dredged through the other's corporate history for purported instances of self-dealing and incompetence.
This week Barnes & Noble is hoping to win the backing of Institutional Shareholder Services, an influential company whose advice on proxy fights is closely followed by corporate investors. Barnes & Noble has already won the qualified support of a smaller adviser, Glass Lewis & Company.
The fight over Barnes & Noble may seem disproportionate to what is at stake. The company's market value has shrunk to less than $1 billion, and bookselling has been squeezed by Amazon.com on one end and Wal-Mart Stores on the other. But as Mr. Riggio says, the battle touches on deep reservoirs of sentiment about an empire he fashioned starting with a small bookstore 39 years ago.
"Lots of people have an emotional stake in books," he said. "It's not like what they have with their haberdashers."
For his part, Mr. Burkle has praised Mr. Riggio's accomplishments in building up Barnes & Noble and professes a desire for peace with his longtime acquaintance. But he also described Mr. Riggio as intolerant of questions about his strategy and management.
"With Len, you're either a white hat or a black hat," Mr. Burkle said in an interview by phone from his plane.
Mr. Burkle said he was not seeking control of the company through the proxy fight, but wanted to have independent directors on the board.
"I want someone in there who doesn't say, 'That's the most amazing thing I ever heard' every time Len opens his mouth," he said.
Mr. Riggio's biggest challenge remains grappling with the Internet, and he argues that digital bookselling is the biggest opportunity since the paperback revolution. Barnes & Noble's e-reader, the Nook, has been making headway in sales, he said. (The company says it controls about 20 percent of the e-book market, based on information from publishers.)
He also pointed to growth at the company, which reported net income of $36.7 million on a 31 percent gain in revenue, to $5.8 billion, for the year ended May 1. For its most recent quarter, Barnes & Noble reported a 21 percent jump in overall revenue, to $1.4 billion, though it posted a $63 million net loss as a result of the legal fight with Mr. Burkle and weakening sales of print books.
Many analysts and industry executives do not share Mr. Riggio's optimism. Shares in the company have tumbled 28.9 percent in the last year. An analyst at Bank of America Merrill Lynch downgraded Barnes & Noble to "underperform" last week, arguing that the company's digital strategy faced major challenges from wealthier rivals like Amazon and Apple.
Mr. Burkle, who amassed his fortune in supermarket chains, alarmed Barnes & Noble when his investment company, Yucaipa, began buying up shares last year, acquiring a nearly 20 percent stake. He described Mr. Riggio's strategy as too little, too late.
Adding to Mr. Riggio's anxiety were the near-simultaneous share purchases made by Aletheia Research and Management, an investment firm based in California that has often followed in Mr. Burkle's footsteps. To the company's management, Yucaipa and Aletheia's moves represented a potential stealth takeover of Barnes & Noble without a premium for shareholders.
Mr. Burkle has denied working in concert with Aletheia.
Glass Lewis and Mr. Riggio have questioned Mr. Burkle's lack of an alternative vision for Barnes & Noble.
When pressed, Mr. Burkle says he has ideas for the company, but adds that because he is not seeking outright control of Barnes & Noble he sees no need to share them publicly.
In the last two weeks, the clashes have become more personal, with Barnes & Noble and Yucaipa trading blows over past business decisions.
Barnes & Noble published a 26-page compendium last week of what it described as examples of Mr. Burkle's having gained control of companies without paying a premium or making disastrous business decisions.
One involved a series of transactions by Source Interlink, a media and distribution company created from Yucaipa-instigated deals, and in which Mr. Riggio was an investor; the company filed for bankruptcy in 2008. Another involved the merger of Pathmark and the Great Atlantic and Pacific Tea Company, a union that Barnes & Noble said resulted in gains for Yucaipa far beyond those realized by other shareholders.
Mr. Burkle called the 26-page document misleading or inaccurate and pointed to several deals made by Barnes & Noble for companies in which the Riggio family had ownership interests. Chief among those, Mr. Burkle said, was the $514 million deal last year for a college bookstore business owned by Mr. Riggio and his wife. (Excluding cash held by the college unit, the deal amounted to $439 million, or about 3.8 times its profits.) The acquisition led to a spate of investor lawsuits, which are still pending.
Glass Lewis has questioned Barnes & Noble's past pay practices, arguing that the company drastically overpaid its executives in light of its stock performance. Barnes & Noble's new chief executive, William Lynch, is paid $900,000 in salary, while his predecessor, Stephen Riggio, who was also vice chairman, was paid $800,000. Stephen, Mr. Riggio's younger brother, remains vice chairman and now earns $400,000.
Mr. Riggio - who reduced his salary this year to $100,000 from $300,000 - made no apologies for what he said were necessary costs for hiring good executives. "I'm significantly undercompensated," he said. "Steve is undercompensated."
Mr. Burkle has raised questions about whether Barnes & Noble's plan to sell itself will be fair and open to any bidder besides Mr. Riggio, who has indicated that he may make an offer.
About 20 parties, including private equity firms, have either signed nondisclosure agreements with Barnes & Noble or are close to doing so, people with direct knowledge of the process said, adding that preliminary offers could be due as soon as next month.
Yucaipa has not signed an agreement, Mr. Burkle said, arguing that such documents typically contain onerous restrictions for potential bidders.
Dismissing concerns that the sale process was being handled improperly, Mr. Riggio said, "If there's any stink to the process, it'd be all over the Street."
http://finance.yahoo.com/news/The-S...9.html?x=0&sec=topStories&pos=6&asset=&ccode=
MICHAEL J. DE LA MERCED, On Monday September 20, 2010, 2:41 am EDT
By MICHAEL J. de la MERCED
Leonard S. Riggio, the pugnacious Barnes & Noble chairman, may be in the fight of his career, but he says he doesn't relish it.
"I find it almost repulsive I have to be put in a position to defend myself," Mr. Riggio said last week in Barnes & Noble's corporate offices, leaning forward to press his point. "I don't want to consume myself with not liking people."
Just over a week before Barnes & Noble shareholders convene for their annual meeting, Mr. Riggio remains locked in battle with the billionaire investor Ronald W. Burkle over three board seats, including Mr. Riggio's. And Barnes & Noble has begun seeking potential buyers for the entire 1,350-store chain.
Mr. Riggio, 69, lights up when talking about walking into physical bookstores or building up his company's digital one. It is his vision for the company that is at the center of the increasingly fierce proxy fight, one that began last month and in which both sides have recently dredged through the other's corporate history for purported instances of self-dealing and incompetence.
This week Barnes & Noble is hoping to win the backing of Institutional Shareholder Services, an influential company whose advice on proxy fights is closely followed by corporate investors. Barnes & Noble has already won the qualified support of a smaller adviser, Glass Lewis & Company.
The fight over Barnes & Noble may seem disproportionate to what is at stake. The company's market value has shrunk to less than $1 billion, and bookselling has been squeezed by Amazon.com on one end and Wal-Mart Stores on the other. But as Mr. Riggio says, the battle touches on deep reservoirs of sentiment about an empire he fashioned starting with a small bookstore 39 years ago.
"Lots of people have an emotional stake in books," he said. "It's not like what they have with their haberdashers."
For his part, Mr. Burkle has praised Mr. Riggio's accomplishments in building up Barnes & Noble and professes a desire for peace with his longtime acquaintance. But he also described Mr. Riggio as intolerant of questions about his strategy and management.
"With Len, you're either a white hat or a black hat," Mr. Burkle said in an interview by phone from his plane.
Mr. Burkle said he was not seeking control of the company through the proxy fight, but wanted to have independent directors on the board.
"I want someone in there who doesn't say, 'That's the most amazing thing I ever heard' every time Len opens his mouth," he said.
Mr. Riggio's biggest challenge remains grappling with the Internet, and he argues that digital bookselling is the biggest opportunity since the paperback revolution. Barnes & Noble's e-reader, the Nook, has been making headway in sales, he said. (The company says it controls about 20 percent of the e-book market, based on information from publishers.)
He also pointed to growth at the company, which reported net income of $36.7 million on a 31 percent gain in revenue, to $5.8 billion, for the year ended May 1. For its most recent quarter, Barnes & Noble reported a 21 percent jump in overall revenue, to $1.4 billion, though it posted a $63 million net loss as a result of the legal fight with Mr. Burkle and weakening sales of print books.
Many analysts and industry executives do not share Mr. Riggio's optimism. Shares in the company have tumbled 28.9 percent in the last year. An analyst at Bank of America Merrill Lynch downgraded Barnes & Noble to "underperform" last week, arguing that the company's digital strategy faced major challenges from wealthier rivals like Amazon and Apple.
Mr. Burkle, who amassed his fortune in supermarket chains, alarmed Barnes & Noble when his investment company, Yucaipa, began buying up shares last year, acquiring a nearly 20 percent stake. He described Mr. Riggio's strategy as too little, too late.
Adding to Mr. Riggio's anxiety were the near-simultaneous share purchases made by Aletheia Research and Management, an investment firm based in California that has often followed in Mr. Burkle's footsteps. To the company's management, Yucaipa and Aletheia's moves represented a potential stealth takeover of Barnes & Noble without a premium for shareholders.
Mr. Burkle has denied working in concert with Aletheia.
Glass Lewis and Mr. Riggio have questioned Mr. Burkle's lack of an alternative vision for Barnes & Noble.
When pressed, Mr. Burkle says he has ideas for the company, but adds that because he is not seeking outright control of Barnes & Noble he sees no need to share them publicly.
In the last two weeks, the clashes have become more personal, with Barnes & Noble and Yucaipa trading blows over past business decisions.
Barnes & Noble published a 26-page compendium last week of what it described as examples of Mr. Burkle's having gained control of companies without paying a premium or making disastrous business decisions.
One involved a series of transactions by Source Interlink, a media and distribution company created from Yucaipa-instigated deals, and in which Mr. Riggio was an investor; the company filed for bankruptcy in 2008. Another involved the merger of Pathmark and the Great Atlantic and Pacific Tea Company, a union that Barnes & Noble said resulted in gains for Yucaipa far beyond those realized by other shareholders.
Mr. Burkle called the 26-page document misleading or inaccurate and pointed to several deals made by Barnes & Noble for companies in which the Riggio family had ownership interests. Chief among those, Mr. Burkle said, was the $514 million deal last year for a college bookstore business owned by Mr. Riggio and his wife. (Excluding cash held by the college unit, the deal amounted to $439 million, or about 3.8 times its profits.) The acquisition led to a spate of investor lawsuits, which are still pending.
Glass Lewis has questioned Barnes & Noble's past pay practices, arguing that the company drastically overpaid its executives in light of its stock performance. Barnes & Noble's new chief executive, William Lynch, is paid $900,000 in salary, while his predecessor, Stephen Riggio, who was also vice chairman, was paid $800,000. Stephen, Mr. Riggio's younger brother, remains vice chairman and now earns $400,000.
Mr. Riggio - who reduced his salary this year to $100,000 from $300,000 - made no apologies for what he said were necessary costs for hiring good executives. "I'm significantly undercompensated," he said. "Steve is undercompensated."
Mr. Burkle has raised questions about whether Barnes & Noble's plan to sell itself will be fair and open to any bidder besides Mr. Riggio, who has indicated that he may make an offer.
About 20 parties, including private equity firms, have either signed nondisclosure agreements with Barnes & Noble or are close to doing so, people with direct knowledge of the process said, adding that preliminary offers could be due as soon as next month.
Yucaipa has not signed an agreement, Mr. Burkle said, arguing that such documents typically contain onerous restrictions for potential bidders.
Dismissing concerns that the sale process was being handled improperly, Mr. Riggio said, "If there's any stink to the process, it'd be all over the Street."