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Borders Group Inc., the second-largest bookseller in the U.S., announced yesterday that it is "reevaluating" a proposed offering of $250 million in convertible senior notes intended to pay down debt. The company had announced the offering of the seven-year notes fifteen hours earlier, but ran into opposition from several unidentified investors. David Dreman, whose Dreman Value Management LLC is Borders' largest shareholder, speculated that investors may be concerned that the issuance of debt will lower the odds of an LBO for the company, which posted an unanticipated Q4 loss last month. Dreman says he is not one of the investors who objected to the offering. Borders CEO George Jones said last month that investors should "not waste time thinking'' about an LBO. Some investors are known to favor a merger with Barnes & Noble, Borders' biggest rival. Borders is planning to close half its Waldenbooks stores and is considering selling most of its international operations. The company's shares rose $0.40, or 2%, to close at $20.94.

Sources: Wall Street Journal, Business Week, Bloomberg
Commentary: Borders Reports Q4 Loss, Announces Long-term Strategic PlanWill Borders and Barnes and Noble Become Book Buddies?Pershing Square Capital's William Ackman: Buys, Sells, Portfolio
Stocks/ETFs to watch: Borders Group, Inc. (BGP). Competitors: Barnes & Noble Inc. (NYSE:BKS), Books-A-Million Inc. (NASDAQ:BAMM), Amazon.com Inc. (NASDAQ:AMZN)

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Source: Borders Cancels Debt Sale on Shareholder Objections