Activist hedge fund manager Bill Ackman reported a 37% stake in
Borders Group Inc. (BGP), up from 31% as of May, and said he would
be prepared to finance the bookseller's purchase of larger rival
Barnes & Noble for about $900 million.
The proposed $16-a-share offer for Barnes & Noble compares
with the book chain's $13.28 Friday closing price. Its shares, down
30% this year as of Friday's close, were inactive in recent
premarket trading.
Spokesmen from Borders and Barnes & Noble weren't
immediately available for comment.
Barnes & Noble last month posted its third-straight
quarterly loss and gave a muted forecast, though its bottom line
improved from the prior year as revenue from a college-bookselling
business it bought from its chairman last year added to
results.
Meanwhile, Borders has struggled amid a sharp decline in sales
and customer traffic, while its margins have continued to fall. Its
chairman, Bennett LeBow, has been tightening his grip on the
struggling bookseller, as shareholders in September voted to give
him veto power on changes to any executive officer post. His stake
as of October was 35%.
Ackman often takes large stakes in the handful of companies in
which he invests. He recently stepped up his position in Fortune
Brands Inc. (FO), the maker of Jim Beam bourbon, Moen faucets and
Titleist golf balls. The Wall Street Journal last month reported
the company might cooperate with him on a breakup plan. He also
recently increased his stake in J.C. Penney Co. and said he is
teaming up activist efforts with Vornado Realty Trust (VNO).
Borders closed Friday at $1.08 and was inactive premarket. The
stock had declined 8.5% so far this year.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; matthew.jarzemsky@dowjones.com