This time, the outcome is very clear. Approximately 52.5% of all shares present at the September 28 annual meeting -- roughly 26 million of them, give or take -- voted to put Riggio's slate of three nominees (including himself) on B&N's board of directors instead of the trio backed by Burkle's Yucaipa Cos. The majority of shareholders also rejected Burkle's bid to increase the percentage of shares triggering the "poison pill" measure from 20% to 30%, and this new meeting will likely ratify the 20% plan, approved by the board almost a year ago.
As DailyFinance pointed out after last month's big showdown that wasn't, the outcome doesn't mean Burkle is out of the picture. His stake in B&N is now at 19.2%. He lost his lawsuit against the board in Delaware Chancery Court for the "poison pill" provision, but it's now on appeal. The most interesting potential twist, however, comes courtesy of the SEC, which is set to implement new shareholder access rules in 2011 that could start the proxy fight battle all over again.
Greater Access to the Board
Last August, by a narrow 3-2 margin, the SEC approved a new rule that will allow shareholders -- particularly institutional investors -- "to nominate a minority slate of one or two director candidates for election on corporate boards inexpensively, using company proxy documents." That's crucial because as things stand now, minority shareholders are free to nominate board candidates, but doing so is tremendously expensive. As Nell Minow, chairwoman of The Corporate Library, told DailyFInance's Bruce Watson, these campaigns can cost upwards of $15 million, which means that few individuals can privately fund them.
Yucaipa, worth billions of dollars, was in a good position to launch a proxy fight for board seats on its own dime, but knowing such moves could be far cheaper in the future may spur it to try again.