Barnes & Noble Inc. |BKS
Yucaipa Cos. LLC
Market cap $1.2 billion
Share price 05/10/10 $21
Yucaipa Cos. LLC took its challenge of Barnes & Noble Inc. to Delaware Court of Chancery, raising questions about the book retailer's poison pill.
Yucaipa owns 19.6% of Barnes & Noble and has been at loggerheads for months with the company's founding Riggio family, holders of 32.4%, over the structure of B&N's poison pill, which was adopted last fall after Yucaipa raised its stake in the company.
Yucaipa managing director Ronald Burkle paints B&N's acquisition of Barnes & Noble College Booksellers Inc. from chairman Leonard Riggio as an insider deal.
The West Coast activist investor wants the Delaware court to clarify whether the pill allows the Riggios to continue to acquire shares in Barnes & Noble. Burkle also seeks a ruling that Yucaipa should be allowed to buy up to the 32% level that the Riggios hold or alternatively that the Riggios should not be allowed to vote shares they own in excess of the 20% pill threshold.
B&N has a nine-member staggered board, and Yucaipa says it will run a slate of three dissident directors at the next annual meeting, which is expected to be held in September. It has asked Delaware to rule that talking to other shareholders about that slate will not trip the pill. Aletheia Research and Management Inc. has built a 17.4% stake in B&N.
The bookseller says the lawsuit is baseless and that the pill will be put to a shareholder vote within the year.
CKX Inc. |CKXE
Robert F.X. Sillerman
Deal value $550 million
Spread 05/10/10 24 cents, or 4.2%
Robert Sillerman is planning another buyout of CKX Inc. even as his investment partner in the previous attempt, Huff Alternative Fund LP, argues in New York that Sillerman stripped a CKX spinoff of its shareholder value.
Sillerman retreated from a proposed buyout of CKX, which owns the American Idol brand, Elvis Presley rights including the Graceland business and the imprimatur to Muhammad Ali, in late 2008 as markets sank.
That complex buyout suffered several revisions. The deal included a spinoff of CKX's partial ownership of Las Vegas real estate to shareholders under FX Real Estate & Entertainment Inc., or FXRE, and a subsequent rights offering that Sillerman and Huff backstopped to the tune of $100 million.
The big picture for the CKX media play includes building a Vegas venue on FXRE property to leverage the Ali, Elvis and Idol brands. But FXRE is insolvent. The Huff suit over FXRE alleges that Sillerman and CKX insiders are unjustly exploiting the FXRE real estate bankruptcy to retain ownership of the land to the detriment of FXRE junior creditors and shareholders.
In the meantime, Sillerman resigned from the chairmanship of CKX to facilitate a renewed buyout of the company.
Hardinge Inc. |HDNG
Indústrias Romi SA
Deal value $116 million
Spread 05/10/10 36 cents, or 3.7%
Indústrias Romi SA of Brazil raised its hostile bid for Hardinge Inc. of Elmira, N.Y., and dubbed its latest offer as best and final. The $10-per-share offer comes at the low end of Hardinge's December claim that a bid would have to be in the double digits.
Hardinge held its annual meeting May 4. The company has a seven-member staggered board with three directors up for election at the meeting, including its CEO. Of the 8.3 million shares present, about 3 million voted for the director nominees and 3.5 million were withheld.