Barnes & Noble said it failed to reach a deal to end a rift with billionaire investor Ron Burkle, casting doubt on the bookstore chain’s ability to attract buyers and raising the specter of a proxy battle.
“Barnes & Noble and Yucaipa were unable to conclude an agreement on mutually acceptable terms,” the company said in a statement on Thursday, referring to Burkle’s investment firm.A representative for Yucaipa declined to comment.
Late Wednesday, a source familiar with the talks said the sides could be close to a settlement to end Burkle’s suit against the company and prevent a proxy fight.
This month, Barnes & Noble put itself up for sale after years of sales declines. The top U.S. book-selling chain has suffered as book sales go digital. It is trying to retool itself and become a leader in the growing e-books market.
Leonard Riggio, the retailer’s chairman and largest shareholder with a 28.7 percent stake, is considering making a bid for the company as part of a larger investor group.
Fractious relations with Burkle, who is suing to void a “poison pill” anti-takeover defense and has criticized Riggio’s leadership, are a major potential roadblock to finding buyers, analysts say.
Burkle holds a 19.2 percent stake in the company. The poison pill would be triggered at 20 percent.
In a research note, Standard & Poor’s Equity Research analyst Jason Asaeda reaffirmed a “hold” recommendation on Barnes & Noble shares, writing that “a battle for control between Mr. Burkle and the company’s founder and largest shareholder, Leonard Riggio, could drive up the share price in the near term.”
Barnes & Noble shares were up 35 cents, or 2.4 percent, to $14.83 in afternoon trade after rising as high as $15.20 earlier in the session.
The chain operates about 720 namesake superstores in the United States.
