Yucaipa invests $67.3m in book retailer

The Ron Burkle-owned investment firm has acquired an 8.3% stake in Barnes & Noble whose stock the firm views as undervalued. Barnes & Noble competitor Borders Group has hired the founder of private equity firm Wildridge Capital Management as its new head.

Ron Burkle-owned private equity firm The Yucaipa Companies has purchased an 8.3 percent stake in book retailer Barnes & Noble for roughly $67.3 million, according to a regulatory filing.

Barnes & Noble:
undervalued

The investment was made through a series of 16 transactions between 24 November 2008 and 31 December 2008. The firm viewed Barnes & Noble as an attractive investment opportunity because the company's shares are undervalued, Yucaipa said.     
 
Mid-market buyout and growth fund the Yucaipa American Alliance Fund II purchased a total of 2.75 million shares and the Yucaipa American Alliance Parallel Fund II purchased a total of 1.8 million shares.

Los Angeles-based Yucaipa was founded in 1986 by billionaire supermarket mogul Burkle.

Competing book retailer Borders Group has brought on private expertise as well, appointing private equity executive Ron Marshall as president and chief executive officer. He was previously principal and founder of Wildridge Capital Management.