Borders Group Said to Find No Bidder Willing to Buy Entire U.S. Bookseller
Borders Group Inc. (BGP), the bankrupt U.S. bookstore operator looking to reorganize, has so far failed to find a bidder for the entire chain, according to four people familiar with the matter.
Barnes & Noble Inc. (BKS), Borders’s larger rival, offered to buy about 10 stores, said two of the people, who declined to be identified because the process isn’t public. Other parties also bid for parts of the business, the people said.
The deadline for so-called going-concern bids that would keep the company operating was May 6, four of the people said. Borders and its advisers are still negotiating with a party that has put in an expression of interest for the company that would retain more than 200 stores, one person said.
The expression of interest is non-binding and requires due diligence by the interested party so talks could fall through at any time, said this person. The company hopes to find a buyer for some or all of the business in the next few weeks, two people said.
The lack of offers for the whole chain may spell the end for Ann Arbor, Michigan-based Borders, founded 40 years ago as a single used bookstore in Michigan. The company filed for bankruptcy protection in February after losing sales to digital devices such as Amazon.com Inc.’s Kindle reader.
Borders, which is closing about one-third of its stores, posted an operating loss of $24.3 million in March, according to court papers. Before seeking protection, Borders had posted sales declines for five straight years, from a peak of more than $4 billion in 2006.
“We are focused on moving forward with the execution of our business plan,” Mary Davis, a Borders spokeswoman, said in an e-mail yesterday. “We are continuing to evaluate interest in the company as expressed through the ongoing Chapter 11 process.”
Mary Ellen Keating, a Barnes & Noble spokeswoman, yesterday said she couldn’t confirm whether the company had bid on any stores. Andrew Glenn, a bankruptcy lawyer for Borders, declined to comment.
Brothers Tom and Louis Borders started the company in 1971, building the chain to almost 20 stores before selling to Kmart Corp. in 1992. Three years later, the retailer spun off the business, which had locations under the Borders, Waldenbooks and Planet Music brands.
Lawyers for the company said April 14 that it would consider a sale of assets along with a stand-alone reorganization. Any sale would require bankruptcy court approval.