Second Firm Backs Barnes & Noble Against Burkle

(Reuters) – Egan-Jones Proxy Services has recommended that Barnes & Noble Inc. shareholders support the bookseller in its proxy battle with billionaire investor Ron Burkle, becoming the second advisory firm this week to side with the bookstore chain.

Egan-Jones said shareholders should support two of Barnes & Noble’s three nominees for the board, including chairman and top shareholder Leonard Riggio at the retailer’s annual meeting on Sept. 28 in New York. It also urged them to reject Burkle’s proposal to change Barnes & Noble’s anti-takeover poison pill.

Egan Jones said in its report that Burkle has not proposed a “convincing strategy” to turn the retailer around, echoing an analysis submitted on Wednesday by Glass Lewis & Co.

Burkle, whose Yucaipa Companies owns 18.8 percent of the retailer’s shares and is its second-largest shareholder, last month launched a proxy war against Riggio and the company, charging Riggio, who founded the chain, has mismanaged Barnes & Noble for his own benefit. Riggio owns 28.2 percent of shares.

Burkle has nominated himself and two others for election to the board for three-year terms.

Egan-Jones recommended shareholders withhold support from Barnes & Noble nominee David Golden, a partner in investment firm Revolution LLC, because he serves on too many boards.

In a statement, Barnes & Noble said, “Egan-Jones’s analysis reiterates what we have been saying all along — Yucaipa has not put forth a convincing strategy.”

Representatives for Yucaipa did not immediately return a request for comment.

Barnes & Noble shares closed down 0.4 percent at $15.88.