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Need To Know

Burkle Bested For Barnes & Noble

Chalk one up for the incumbents. Leonard Riggio, the chairman of Barnes & Noble Inc., fought off dissident investor Ron Burkle‘s attempt to join the company’s board and said he would be soliciting interested buyers, according to Reuters, the publisher of Buyouts.

Buyout firms including Bain Capital, Apollo Global Management LP, TPG Capital and others are interested in taking a look at the top U.S. bookseller, sources have said.

Preliminary results from the Barnes & Noble annual shareholder meeting showed that holders of 44 percent of the shares eligible to be voted supported the slate chosen by Riggio, while 39 percent supported Burkle’s slate, according to a source familiar with the results. The rest did not vote, or withheld their votes. “Our job is to get a lot of other bidders interested,” Riggio, the top Barnes & Noble shareholder with a 28.2 percent stake, told reporters after the shareholder meeting in New York.

Some 20 groups have or are expected to sign confidentiality agreements ahead of potential bids, with books on the company already being sent out, according to cable business channel CNBC. Riggio said in the past he would look for partners to buy the company, but declined to elaborate on his current plans.

Burkle, whose investment firm Yucaipa owns 18.8 percent of the company, seized on the results to say Riggio must conduct a transparent auction that delivers the best possible outcome for investors. Some investors and analysts say Burkle may tender his own bid.

Bank Taxes in Europe, Penalties For Raters

European Union governments are aiming to agree to a package of financial reforms by the end of the year, which would include an EU-wide bank tax and a series of financial penalties aimed at credit rating agencies, according to IFR, a sister publication of Buyouts.

Didier Reynders, the finance minister of Belgium, speaking at a symposium on EU regulation, said the EU is working on measures to make sure that failing banks do not have to be bailed out by taxpayers in the future. One of the measures under consideration is a levy on banks to finance a special bank wind-down fund, which the European Commission has been promoting for a good part of this year. The commission’s idea has met with varying degrees of opposition from the UK, France and Germany, which either have or are planning to introduce their own special bank taxes.

Another possibility is a tax on financial transactions or Tobin tax. However, a Tobin tax—a small tax that would apply not only to a financial transaction, such as a securitized loan, but also to all the constituent elements—has been dismissed by the International Monetary Fund and by a research document from the commission as unworkable as it could easily be circumvented through derivatives, such as contracts for difference.

Nonetheless, Reynders said the EU will seek to have an agreement on the matter by the end of the year.

Reynders also said the new European Securities and Markets Authority, to be launched next January, should have the power to impose financial penalties on credit rating agencies, which fail to follow the rules. Belgium currently chairs the six-month rotating presidency of the EU.