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Wednesday, 16 February 2011

Another one bites the dust - Bye Bye Borders

It's not exactly a surprise to those who keep an eye on the industry but yesterday Borders US went into bankruptcy. It's a sad thing to see yet another well known name in bookselling vanish. I was absolutely gutted when Borders closed its stores in the UK a little over two years ago and have missed my local Borders store ever since. The thing with Borders was that it stocked a lot of import magazines not seen in the likes of Waterstones - I used to pick up Ellery Queen, Alfred Hitchcock and Wild West Magazine there. You don't see these titles anywhere else and now I have to buy by mail. Borders was also well stocked on the music front and carried non chart titles. I don't know if the situation is the same in the US but Borders UK operated in a section of the market that no one else has filled.

Borders put itself up for sale in March 2008 and speculation mounted that Barnes & Noble would buy it. Borders ended the process in November of that year without finding a bidder, and Pershing sold its Barnes & Noble stake in December 2008.

Ackman also approached Leonard Riggio, founder and chairman of Barnes & Noble, and Ronald Burkle, a large Barnes & Noble investor, about combining the companies, according to court documents and testimony from a lawsuit last year. Riggio declined to pursue a deal for Borders because he didn’t want any more exposure to retail space, court documents showed.

On Dec. 6, Pershing offered to help Borders fund an all- cash acquisition of Barnes & Noble for $16 a share, valuing the chain at about $960 million. At the time, Barnes & Noble declined to respond.
Now Borders’s bankruptcy could put $550 million in revenue up for grabs, Gary Balter, an analyst for Credit Suisse, wrote yesterday in a note to clients. The closings may increase sales at Barnes & Noble superstores 6 percent, said Balter, who has a “neutral” rating on Barnes & Noble shares.

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