Quantcast
  

Sunday, April 20, 2014         

 Print   Email   Comment | View 0 Comments   Most Popular   Save   Post   Retweet

Borders liquidation looms as early offer falls through

By Mae Anderson

Associated Press

POSTED:
LAST UPDATED: 02:26 p.m. HST, Aug 05, 2011

Borders Group teetered on the brink of liquidation Thursday after creditors and landlords objected to an offer from a private-equity investor. Here, customers visit a Borders Books & Music store in Ann Arbor, Mich.

NEW YORK » Borders Group, the nation's second-largest bookstore chain, which once operated more than 1,000 stores, appears headed for liquidation after a judge on Thursday approved its motion to auction itself off with a team of liquidators as its opening bid.

The move came after an offer made earlier this month from a private-equity investor disintegrated overnight.

Borders said it will accept bids until 5 p.m. Sunday and will give notice by Monday if no other bidder emerges.

Earlier this month, private-equity investor Najafi Cos. from Phoenix offered $215 million for the company, plus the assumption of $220 million in debt.

But on Wednesday creditors objected, saying that the agreement would not prevent Najafi from taking possession of the company and liquidating it immediately for profit. Landlords also objected.

Creditors said a bid from liquidators Hilco Merchant Resources and Gordon Bros. is stronger. They believe it would pay out between $252 million and $284 million in cash.

Creditors said in a court filing that they were hopeful Najafi would submit a higher bid, but Najafi stood by its original offer.

On Thursday, Borders said it wouldn't seek approval for Najafi's bid at a scheduled hearing in the U.S. Bankruptcy Court Southern District of New York and designated the liquidators as the primary, or "stalking horse," bid.

Meanwhile, one analyst speculated that if Borders liquidates, that could spark a higher bid for its chief rival, Barnes & Noble. Financier John Malone's Liberty Media made a $1 billion offer to buy Barnes & Noble in May.

Liberty Media has said it values Barnes & Noble for both its Nook e-reader business and its retail stores, so a full liquidation of Borders would increase the value of the retail side of the business, Janney Capital Markets analyst David Strasser said.

"This is perhaps an opportunity for a higher negotiated bid via Liberty or an entrance of another bidder," he wrote in a note.

Borders Group Inc., based in Ann Arbor, Mich., filed for bankruptcy protection in February. The company started with a single store in 1971 and helped pioneer the book superstore concept along with larger rival Barnes & Noble Inc. It was brought down by heightened competition by discounters and online booksellers, as well as the growth in popularity of electronic books.

It currently operates about 400 stores, down from its peak in 2003 of 1,249 Borders and Waldenbooks, and has about 11,000 employees.






 Print   Email   Comment | View 0 Comments   Most Popular   Save   Post   Retweet

COMMENTS
(0)
You must be subscribed to participate in discussions
By participating in online discussions you acknowledge that you have agreed to the TERMS OF SERVICE. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. Because only subscribers are allowed to comment, we have your personal information and are able to contact you. If your comments are inappropriate, you may receive a warning, and if you persist with such comments you may be banned from posting. To report comments that you believe do not follow our guidelines, email commentfeedback@staradvertiser.com.
Leave a comment

Please login to leave a comment.
IN OTHER NEWS
Latest News/Updates