Borders Group Inc. (BGP) postponed its special shareholder's
meeting a day to Thursday as enough people haven't voted yet on a
potentially highly dilutive stock issuance that could increase
Chairman Bennett LeBow's grip on the struggling bookseller.
Borders in July scheduled the meeting as the forum for a
shareholder vote over the issuance of 35.1 million shares and
warrants that would allow an entity controlled by LeBow to buy them
for $2.25 each. The company had about 65 million shares outstanding
as of July 31.
President Mike Edwards said in a statement that support for the
proposal has been "strong" but a quorum hasn't been reached yet to
start the meeting as "there are a significant number of
shareholders who have not yet ahd the opportunity to vote."
The measure is related to a transaction announced in May, in
which LeBow, also a noted financier and chairman of Vector Group
Ltd. (VGR), invested $25 million in Borders and was given control
of the board. William Ackman's Pershing Square Capital Management
LP, then the largest single investor in Borders, supported the
transaction.
LeBow's investment has propped up the No. 2 U.S. bookstore
operator, which has struggled with sliding sales and margins.
Shares were up a penny at $1.23 in recent trading.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com