Is Borders saved? The Gores Group, a Los Angeles-based private equity firm that often invests in distressed companies and has hopes to build an entertainment conglomerate, has emerged as a possible bidder for 200 of the bookstore chain’s remaining 405 stores in a deal worth about $200 million, the WSJ reports. The talks “remain fluid and could fall apart.”
Unnamed sources say that other possible bidders are also in discussions with Borders; one source said that interest in the chain has picked up since Liberty Media’s bid for Barnes & Noble.
Barnes & Noble (NYSE: BKS) had previously offered to buy about 10 Borders stores.
The Gores Group, run by brothers Alec and Tom Gores, has previously invested in The Alliance Group, which distributes DVDs, CDs, and video games to retail stores like Barnes & Noble; radio programming company Westwood One; Diagnostic Health Corp.; Siemens Enterprise Communications; and women’s clothing company Big Strike. The Gores’ brother Sam is the chairman of Paradigm Talent Agency. Last year, the LA Times reported that the Gores were considering buying Universal Pictures’ Focus Features and had also looked at Miramax Films and Starz, in hopes of building an “entertainment empire.”
The news about Gores Group came ahead of a hearing today in which U.S. Bankruptcy Judge Martin Glenn ruled that Borders could have four more months to submit a turnaround plan.
will rule whether Borders can have four more months to submit a turnaround plan. If the judge had denied the motion, Borders would have had to submit its plan by June 16. Borders has closed 226 stores since February 16 and has filed a motion to end its relationship with Seattle’s Best Coffee, but these moves have not prevented it from losing money.
Borders’ unsecured creditors, mainly major book publishers who are owed millions of dollars, had filed an objection to Borders’ request for more time, saying they were “gravely concerned” by the fact that the Ann Arbor-based bookstore chain continued to lose money–over $180 million between February 16, when it filed for bankruptcy, and April 30. Ken Dalto, a Metro Detroit retail analyst, told the Detroit News yesterday, “It’s normal to have enormous fees [during bankruptcy protection]. What’s not normal is to have continual operating losses in Chapter 11.”
As of June 1, Borders’ eBookstore and e-reading app were both rebranded Kobo and customers were instructed to transfer e-books they’d bought from Borders over to Kobo.