Barnes & Noble’s board of directors has sent an interesting letter to shareholders, urging them to vote against a “predatory shareholder proposal” submitted by investor Ron Burkle’s Yucaipa Companies. The letter, of course, highlights recent strategic moves by the world's largest bookseller to pump up value in a bid to derail Burkle’s plan.

Here’s the letter:

September 9, 2010

PROTECT THE VALUE OF YOUR INVESTMENT IN BARNES & NOBLE:
VOTE THE WHITE PROXY CARD TODAY

Dear Fellow Shareholder:

Barnes & Noble needs your support at the 2010 Annual Meeting of Shareholders on September 28, 2010. Your vote is important – no matter how many shares you own. To protect your investment, please use the enclosed WHITE proxy card to vote today – by telephone or Internet, or by signing, dating and returning the WHITE proxy card in the postage-paid envelope provided.

DON’T BE FOOLED BY MR. BURKLE: WE BELIEVE HE IS SEEKING TO GAIN CONTROL OF BARNES & NOBLE WITHOUT PAYING FULL VALUE

Ronald Burkle, through his investment vehicle Yucaipa, has nominated three hand-picked candidates (including himself) to your Board of Directors and wants to weaken Barnes & Noble’s Shareholder Rights Plan.1 The Rights Plan your Board adopted protects investors by limiting the ability of anyone to acquire more than 20% of Barnes & Noble’s stock without Board approval and preventing two or more parties from teaming up to take control of your company without making an offer to pay all shareholders full value.

Mr. Burkle is seeking the ability for any investor to buy up to 30% of your Company’s shares. While he claims that he wants to “level the playing field,” we believe that he would like the ability to form a control bloc with another Los Angeles-based investor, Aletheia Research & Management, Inc.

Aletheia and Burkle have a history of following each other’s lead in buying significant stakes in companies, and Aletheia built a large stake in Barnes & Noble at around the same time as Burkle. Combined they now own more than 34% of the Company’s shares. If the Rights Plan is amended as Mr. Burkle has requested, Burkle and Aletheia could have a total control bloc by buying only an additional 16% in the open market--without having paid a control premium to Barnes & Noble shareholders.

We believe Burkle’s agenda is self-serving, and your Board strongly urges you to reject his proposals.

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