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Barnes and Noble Heads Off a Stock Takeover?

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November 19 – November 26, 2009 Edition

Barnes and Noble Heads Off a Stock Takeover?

NEW YORK, NY/Authorlink News11/18/09–Barnes & Noble’s board of directors yesterday approved the adoption of a Stockholder Rights Plan (the “Rights Plan”) under which stockholders will receive rights to purchase shares of a new series of preferred stock in certain circumstances.

The new plan comes in the same week that Goldman Sachs reiterated its “Sell” rating on shares of Barnes & Noble stocks when American business billionaire Ron Burkle doubled his stake in the company from 8% to 17%. (See Goldman Sachs Leary of Barnes & Noble Stock)

The Board said in a press release that it adopted the Rights Plan “in response to the recent rapid accumulation of a significant portion of Barnes & Noble’s outstanding common stock. The Rights Plan is intended to protect the Company and its stockholders from efforts to obtain control of the Company that are inconsistent with the best interests of the Company and its stockholders.”

Consistent with Barnes & Noble’s commitment to good corporate governance, the rights will expire in three years and the Company intends to submit the Rights Plan for stockholder ratification within 12 months.

Under the terms of the Rights Plan, the rights will expire on November 17, 2012. The rights will be exercisable if a person or group, without Board approval, acquires 20% or more of Barnes & Noble’s common stock or announces a tender offer which results in the ownership of 20% or more of Barnes & Noble’s common stock. The rights also will be exercisable if a person or group that already owns 20% or more of Barnes & Noble common stock, without Board approval, acquires any additional shares (other than pursuant to Barnes & Noble’s compensation or benefit plans). If the rights become exercisable, all rights holders (other than the person triggering the rights) will be entitled to acquire Barnes & Noble’s common stock at a 50% discount.

The rights will trade with Barnes & Noble’s common stock, unless and until they are separated upon the occurrence of certain future events. Barnes & Noble’s Board may terminate the Rights Plan or redeem the rights prior to the time the rights are triggered. Further details of the Rights Plan will be contained in a Form 8-K to be filed with the Securities and Exchange Commission.

Barnes & Noble, Inc. (NYSE: BKS), the world’s largest bookseller and a Fortune 500 company, operates 774 bookstores in 50 states.