4 Min Read
* Measure is valid for two years
* 72 percent of votes cast in favor of the poison pill
* Burkle gets little support in voting against the pill
* Shares close up 3.1 percent (Adds Burkle statement, updates share movement)
By Phil Wahba
NEW YORK, Nov 17 (Reuters) - Barnes & Noble Inc (BKS.N) shareholders voted overwhelmingly in favor of ratifying a "poison pill" put in place last year to ward off any potential takeover by dissident shareholder Ron Burkle.
Chairman and founder Leonard Riggio said at a special meeting in New York on Wednesday that preliminary results showed 72 percent of the votes cast supported the shareholder rights plan, as the "poison pill" is formally known.
The measure, which will be valid for the next two years, was put in place a year ago, when Burkle's Yucaipa Cos doubled his stake in the top U.S. bookstore chain in a matter of days. Barnes & Noble said then that it would allow shareholders to vote on the pill within a year.
"It shows support for the company -- finally we have this behind us and we can go about the business of running the company," Riggio told Reuters in an interview after the meeting.
The poison pill limits any shareholder, except for Riggio, who is grandfathered, from holding 20 percent or more of the company.
Last month, Barnes & Noble limited the ability of Riggio and his family to increase their stake, addressing a criticism by Burkle that the poison pill favored Riggio.[ID:nN29227624]
Yucaipa said the pressure it has put on Barnes & Noble's board led it to put in those limits, saying in a statement emailed to Reuters they are "just one example of how Yucaipa's efforts have benefited all stockholders."
Yucaipa is the retailer's second-largest shareholder, with a stake of about 18.8 percent, after Riggio, who owns about 29 percent. Burkle, who did not solicit votes against the pill, lost a bitter proxy fight in September, failing to win a seat on its board.
Burkle is appealing a Delaware court decision last August which upheld the pill.
Barnes & Noble has said the pill is needed to keep Burkle from working in conjunction with Aletheia Research and Management Inc, the third-largest shareholder, to take over the company without paying shareholders an adequate premium after Aletheia raised its own stake last year in Barnes & Noble.
But a source familiar with the matter told Reuters that Aletheia, which on Monday said in a filing it had lowered its stake in Barnes & Noble to 14 percent from 15 percent, voted in favor of the pill. That means that, excluding his own shares, Burkle garnered very little support from other shareholders.
The retailer has contended with a long decline in physical books sales and in August put itself up for sale. In recent weeks, it has launched a well-reviewed update of its Nook e-reader and begun testing toy boutiques within its stores.
With the Burkle fight all but over for at least two years, keeping the poison pill in place should give Barnes & Noble some breathing room to re-engineer its business, an analyst said.
"The structural issues involved in day-to-day (business) are still ongoing -- on the fringe gives them comfort shareholders are supporting their view," said Morningstar analyst Pete Wahlstrom.
Barnes & Noble shares ended the day up 3.1 percent at $14.86. (Reporting by Phil Wahba; Editing by Lisa Von Ahn, Matthew Lewis, Gary Hill)