Barnes & Noble chairman exercises options, shares up

LOS ANGELES (Reuters) - Barnes & Noble Inc (BKS.N) Chairman Leonard Riggio exercised his option to buy 990,740 shares in the bookseller at the center of a proxy battle in what the company on Tuesday called a vote of confidence.

Barnes & Noble shares rose 3.5 percent to $15.89 in extended trading.

Riggio, Barnes & Noble's largest shareholder, exercised the options at a strike price of $16.96, or $16.8 million, a 10.5 percent premium to Tuesday's closing share price of $15.35.

The transaction boosted Riggio's ownership to 16.9 million shares, according to regulatory filings.

On August 12 billionaire investor Ron Burkle launched a proxy fight at Barnes & Noble after talks over the future of the largest U.S. bookselling chain collapsed and a poison pill to prevent him from taking over was upheld in court.

Burkle, Barnes & Noble's second-largest shareholder, is fighting for three board seats, including one for himself.

"Mr. Riggio continues to believe Barnes & Noble's stock is undervalued and this exercise of his options demonstrates his belief in the long-term strategy of the company," company spokeswoman Mary Ellen Keating said in a statement.

(Reporting by Lisa Baertlein; Editing by Phil Berlowitz)