ANN ARBOR, Mich. - After failing to find a buyer, Borders Group Inc. has been forced to issue warrants to Pershing Square Capital Management, giving its biggest shareholder even more control over the bookseller.
Borders said in March it would put itself up for sale as part of a larger financial restructuring plan. According to SEC filings, if the company didn't sign an agreement by Wednesday or abandoned its plans, it would have to issue warrants to Pershing.
Ann Arbor-based Borders on Wednesday issued warrants to purchase an additional 5.15 million shares at $7 each up until Oct. 9, 2014.
Pershing, which is run by billionaire hedge fund manager and activist investor William Ackman, currently owns 20.1 million shares of the company, or nearly 29 per cent of outstanding stock. Although a potential deal with Barnes & Noble apparently is off the table, Ackman has suggested that Borders approach online retailer Amazon.com Inc. for a possible deal.
Borders operates more than 1,100 stores worldwide under the Borders and Waldenbooks names. Shares closed Tuesday at $6.56, less than half the $16.62 the stock traded at a year ago.
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