Borders Group (BGP) Volatile As Company Weighs Options
Shares of Borders Group, Inc. (NYSE: BGP), which rose 43% yesterday after an analyst from Goldman Sachs said rival Barnes & Noble (NYSE: BKS) would benefit from buying the company, is down 10% today. Investors are concerned about the fate of the beleaguered book retailer, which has seen its stock sink nearly 70% over the last year.
Last week, Borders Group announced plans to explore strategic alternatives. The review process will include the investigation of a wide range of alternatives including the sale of the company and/or certain divisions for the purpose of maximizing shareholder value. In addition, large shareholder Pershing Square Capital provided the company financing after other alternatives became prohibitively expensive or entirely unavailable to the company due to the current credit crunch. Borders also suspended its quarterly dividend in order to preserve capital.
Last week, at its earnings conference call, Barnes & Noble COO, Mitchell Klipper, said they would take a look at Broders if they were approached. Pershing Square is also a large shareholder in Barnes & Noble.
Longs are looking for a takeover to save the company. Shorts see bankruptcy in the company's future. [LJ]
Create E-mail AlertRelated Categories
Insiders' BlogRumors
Stocks Mentioned
+0.00Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
