Hedge Fund Willing to Fund a Borders Buyout Attempt of Troubled Barnes & Noble. Dunno About You, But of These Two Giants, We’ve Always Liked the Gestalt of Barnes & Noble Better

Dec 6, 2010  •  Post A Comment

A hedge fund is willing to help the Borders book chain bid for its troubled rival, Barnes & Noble, Bloomberg reports.

According to the article, "Williamn Ackman’s Pershing Square Capital Management LP said they may collaborate on an offer for the bookstore chain. Ackman’s New York hedge-fund firm is willing to help Borders fund an offer of $16 a share, according to a regulatory filing today."

Bloomberg continues, "The offer price would value Barnes & Noble at about $960 million, based on the shares outstanding. The proposal from Pershing, the largest Borders holder after Chief Executive Officer Bennett Lebow, would combine the two biggest bookstore chains in the U.S. as sales of paper books slump further.

It’s a bit like the pot trying to save the kettle. Neither chain is doiing well. Louis Meyer, an analyst for Oscar Gruss & Son Inc. in New York, told Bloomberg, "“We have a totally failed bookstore essentially trying to merge with a bookseller that’s the largest in the market that is having a hard time maintaining traction.”

According to the story, "Last month, New York-based Barnes & Noble forecast a wider annual loss than initially projected. The company also said then that it’s still completing a strategic review of its options, including a possible sale."

As far as Borders’ ledger goes, the article notes, "Borders is scheduled to report third-quarter results Dec. 9. The bookstore chain, which has posted four straight annual losses, had $25.1 million in cash and cash equivalents in the quarter ended July 31."

A bit of editorializing here. As was the case when Tower records went out of business, we really hate it when  these big chains that carry books and music go out of business. It’s bad enough that the ranks of all the independent sellers have been decimated. 

It’s a tough dilemma. We like using Amazon and its online brethren as much as anyone. But we also love the joys of browsing in brick and mortar stores.   

One Comment

  1. And exactly how is this germane to the TVBizwire topic?
    And while this may come as a surprise, no one really gives a squat about your relative gestalt rankings.
    Just report on the topic and stick to the facts.

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