DOW JONES NEWSWIRES
Borders Group Inc. (BGP) and its largest shareholder, Pershing
Square Capital Management LP, again extended the expiration date of
their agreement for Pershing Square to buy Borders' U.K.-based
Paperchase gifts and stationery business for $65 million.
The deadline for the struggling bookstore chain to repay a $42.5
million loan from Pershing Square made earlier this year also was
extended to April 15.
The purchase agreement originally was due to expire Jan. 15, but
was extended until Monday. Borders is paying Pershing Square, the
hedge-fund shop run by activist investor William Ackman, $750,000
for reimbursement of expenses and the agreement extension.
Last month, Borders ousted Chief Executive George Jones and his
management team. Installed was Ron Marshall, who has a strong
financial background.
The book chain, like almost all retailers, had a disappointing
holiday season. But its problems stretch back considerably further.
Last March, the bookseller disclosed it faced a potential liquidity
crunch and put itself up for sale. Despite its weak stock price,
the company couldn't find a buyer.
Borders will post its fiscal fourth-quarter results March
31.
Its shares recently traded at 54 cents, up 3.9%. The stock is
down nearly 95% since September.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com