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May 17 – 23, 2010 Edition Borders Raises $25 Million to Transform Brand
ANN ARBOR, MICH/AUTHORLINK NEWS/May 21, 2010Borders Group, Inc. has announced that an entity controlled by Bennett S. LeBow has agreed to invest $25 million in the company through a private purchase of 11.1 million shares of the companys common stock.
The investment–coupled with the companys recently announced financing–will strengthen Borders balance sheet and help fund the transformation of the Borders brand. Mr. LeBows investment will support several important financial and strategic initiatives such as improving the companys capital position, addressing the store network to maximize productivity and profitability, maximizing the digital opportunity including growing Borders.com, and developing strategic business partnerships. The purchase is expected to close later today.
In connection with the investment, Mr. LeBow has joined the Board of Directors and has also been elected Chairman. Mr. LeBow is the Chairman of Vector Group, Ltd. (NYSE: VGR). Howard Lorber, who serves as President and Chief Executive Officer of Vector Group, has also joined the Board of Directors of Borders Group.
Additionally, in order to create the nine-member Board as required by the terms of the transaction, Richard Mick McGuire has resigned from the Board of Directors.
“I am pleased to welcome Ben aboard as the new Chairman,” said McGuire. “Borders has made great progress in improving its financial and operating condition by exiting non-core businesses, reducing fixed costs, improving working capital efficiency, and focusing on operational excellence. More recently, the executive team has begun the process of repositioning the business and in-store experience to succeed in a future of electronic delivery…”
Pershing Square Capital Management, L.P. and its affiliates, which currently is a major shareholder of Borders Group, has indicated its support for the transaction.
Details of the purchase agreement will be included in a Form 8-K to be filed promptly with the Securities and Exchange Commission.
Headquartered in Ann Arbor, Michigan, through its subsidiaries Borders Group, Inc. (NYSE: BGP) is a leading specialty retailer of books as well as other educational and entertainment items. The company employs approximately 19,500 throughout the U.S., primarily in its Borders® and Waldenbooks® stores. Online shopping is offered through borders.com.
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