Barnes & Noble socks it to shareholders with poison pill

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. ... 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.

This is a pretty transparent effort to make it harder for Mr. Burkle to take control of the company away from its board of directors -- which seems pretty ambitious given that shares of Barnes & Noble shares are currently trading at about half their value in 2001.

In June of last year, activist investor Carl Icahn blogged about how bad poison pills are. Icahn wrote that:

Public companies refer to a poison pill as a "shareholder rights plan." Does anyone else find that amusing? If anything, it undermines shareholder rights rather than supporting them. ... To show how ridiculous the pill is, consider this analogy. If you are one of several partners that own a horse and the horse does well, and you agree to purchase another partner's interest, would you allow the trainer to threaten to punish you by diluting your partnership interest to almost no value if you dare to do this? It sounds absurd but this is what happens in corporate America.

Barnes & Noble's board of directors has effectively forced its shareholders to remain under its rule in the wake of a decade-long period of value destruction.