NEW YORK (Reuters) - Billionaire investor Ron Burkle’s investment firm said it has no intention of taking control of Barnes & Noble as it fired a new shot in its proxy battle against the top U.S. bookstore chain.
Burkle, who owns 18.8 percent of Barnes & Noble, launched a proxy battle earlier this month to put three directors, including himself, on the board, shortly after the company put itself up for sale.
Yucaipa Companies, Burkle’s investment company, said in a letter to shareholders on Monday that the current Barnes & Noble board was “not willing to stand up to (Chairman) Leonard Riggio on your behalf and say ‘enough is enough.’”
Riggio built Barnes & Noble into the nation’s largest bookstore chain and is its largest shareholder with a 28.2 percent stake. He is also trying to recruit backers for a bid to take the company private.
Barnes & Noble told investors last week that Burkle was unqualified to sit on its board and accused him of trying to take over the bookseller without rewarding shareholders.
Yucaipa denied the charges in its letter, saying it “has no plan to acquire control of your company.”
“They want to distract you from the real issues: their record of poor performance and their history of approving special treatment and related-party transactions that benefit the Riggio family,” Yucaipa said.
A Yucaipa spokesman told Reuters that the firm has not been contacted by Barnes & Noble either to discuss or invite its participation in an auction for the bookseller.
Barnes & Noble accused Burkle on Monday of “mudslinging,” saying, “Burkle has provided no strategic vision and offered no plan for Barnes & Noble’s future, yet he is persisting with costly litigation and a proxy contest.”
Burkle is also asking shareholders to vote to raise the threshold at which an anti-takeover “poison pill” is triggered to 30 percent from 20 percent at next month’s annual shareholder meeting.
Yucaipa said in its letter that the presence of the poison pill could deter potential bidders for the company, arguing that it gives Riggio an advantage over other shareholders.
Barnes & Noble shares fell 3.4 percent on Monday.
The battle over Barnes & Noble’s future follows a steady stream of sales declines as online booksellers like Amazon.com Inc claim more of its business and readers adopt digital book formats.
Last week, Barnes & Noble posted a steeper-than-expected quarterly loss as its sales of physical books continued to decline, and said its fight with Burkle would further dent results this year.
Barnes & Noble said on Monday it would not renew the lease on one of its eight stores in Manhattan — a 60,000 square-foot location adjacent to Lincoln Center — when it comes due in January because of high rent. The bookseller said it is scouting for a new location in the area.
Analysts have said Barnes & Noble must consider paring back its 717 namesake stores given how much bookselling has shifted to digital. But Barnes & Noble executives have repeatedly told analysts that its retail stores are essential to promoting its Nook electronic reader and selling e-books.
Leases on about 400 Barnes & Noble stores will come up for renewal by April 30, 2014, according to a regulatory filing.
Reporting by Phil Wahba; Editing by Dave Zimmerman and Steve Orlofsky