* Burkle could get board seats, end lawsuit -source
* KB Home's Bollenbach may join board -Wall Street Journal
* Barnes & Noble shares up 3.6 percent
(Adds share price, background, previous dateline LOS ANGELES)
NEW YORK, Aug 12 Barnes & Noble Inc (BKS.N) is
in talks to end a battle with one of its top investors, a
source with knowledge of the discussions said, as the
bookseller tries to attract buyers for its business.
Billionaire Ronald Burkle sued in Delaware Chancery Court
to void the New York-based company's "poison pill"
anti-takeover defense, which he said entrenches the Riggio
family that started the company.
The rift between Burkle and the company was seen as a
barrier to a potential sale of the chain, given his sizable
stake. Founder and chairman Leonard Riggio is seeking investors
to join him in making a bid for the company, which has drawn
interest from several private equity firms. [ID:nN04100058]
A settlement for Barnes & Noble could come soon, perhaps in
the next 24 hours, the source told Reuters late on Wednesday.
The settlement could involve adding three directors to the
nine-person board, the source said, adding that the talks still
might fall apart.
Barnes & Noble's shares rose 3.6 percent to $15 on news of
the talks, giving it a market value just under $880 million.
The talks between Burkle and Barnes & Noble were earlier
reported by The New York Times and The Wall Street Journal.
Burkle's investment firm Yucaipa Cos recently owned 19.6
percent of Barnes & Noble stock.
AVOIDING A PROXY FIGHT
The source said that under the proposed accord, Barnes &
Noble would eventually give up one director. It would require
Burkle to withdraw his lawsuit, agree not to start a proxy
fight and support the company's director candidates in 2010 and
2011, the source said.
According to the Journal, one independent director
expected to be added is Stephen Bollenbach, a former Hilton
Hotels chief executive who is now chairman of KB Home (KBH.N).
The homebuilder did not return a call seeking comment.
At the trial, Burkle testified that Yucaipa had in October
2009 considered, but then decided against, pursuing a $25 per
share buyout bid for Barnes & Noble. He said he considered
that a "waste of time," given the Riggio family's effective
control of 38.2 percent of the stock. [ID:nN08228071]
Leo Strine, the Delaware vice chancellor, is expected to
rule soon in the case.
Barnes & Noble and Yucaipa did not return requests for
comment. Both declined to comment to the Journal. Mary Ellen
Keating, a spokeswoman for Barnes & Noble, and Frank Quintero,
a spokesman for Yucaipa, declined to comment to the Times.
(Reporting by Sue Zeidler in Los Angeles and Jonathan Stempel
in New York; additional reporting by Megan Davies in New York;
Editing by Muralikumar Anantharaman and Robert MacMillan)