Borders Gets More Time

-- Publishers Weekly, 12/23/2008 7:26:00 AM

Borders Group has reached an agreement with Pershing Square Capital Management, its largest shareholder, to extend the expiration date of the previously announced Borders option to sell its U.K.-based Paperchase gifts and stationery business to Pershing Square for $65 million. The “put” was due to expire Jan. 15, 2009, but has been extended until Feb. 16. The delay gives Borders extra time to find a buyer for Paperchase who may be willing to pay more than the $65 million offered by Pershing. At the same time, the deadline for repayment of the $42.5 million loan which was originally payable to Pershing by Borders on Jan. 15, 2009, has also been extended to Feb. 16. Borders is still required to pay the approximately $1 million loan repayment premium to Pershing no later than Jan. 15, 2009. The company’s stock, meanwhile, continues to sell at below $1, closing Monday at 53 cents per share, the 16th straight business day the stock has traded below $1.