Anime News - Direct Brands Parent Agrees to Make Bid for Borders

Najafi, the parent company of the book club Direct Brands, has made a preliminary agreement to become the "stalking horse" for the American bookstore chain Borders in an auction later in July. A "stalking horse" agrees to make the starting bid before an auction begins and can receive compensation if it does not win.

As part of the same agreement, Borders will sell an undetermined number of stores for US $215.1 million cash and US$220 million in assumption of liabilities. According to Borders, the liquidators, Hilco and Gordon Brothers, have agreed to acquire any stores not in the sale and close them "in an orderly manner."

Bids are due July 17. If Najafi wins, Borders would be a wholly owned subsidiary of Direct Brands. If Najafi is outbid for Borders, the requested breakup fee for the chain is US$6.45 million.

Borders reports that if no sales agreement is reached, either with Nafarji or another company, then Borders has a deal with a joint venture consisting of the liquidators Hilco and Gordon Brothers, plus SB Capital Group, Tiger Capital Group, and Great American Group. In this case, Borders's 399 stores would be liquidated. Borders estimates that its liquidation would bring in US$252 to US $284 million.

According to Publishers Weekly, "A chainwide Going Out of Business/Store Closing sale would have to take place on or before July 22. However, if a going concern sale is approved it would take place on or before July 29, and no later than August 5."

Source: Publishers Weekly

(animenewsnetwork.com)