Goldman Cuts Borders Because of Grocery Deal

by Jim Milliot, PW Daily -- Publishers Weekly, 6/6/2007

It is difficult to tell what events can make a company’s stock price rise or fall, but Borders’s stock price was down this morning following a downgrade from Goldman Sachs. In lowering its recommendation from neutral to sell, Goldman cited the news that the FTC is opposing the merger between the two supermarket companies Whole Foods Market and Wild Oats Market. The FTC’s action suggests that the commission would oppose a takeover of Borders by Barnes & Noble, a possibility that had given Borders’s stock price a lift. According to Goldman, the organic food market, like the bookstore market, is dominated by only two companies and if the FTC is prepared to block the Whole Foods/Wild Oats merger, it would likely try to stop a merger between B&N and Borders.