Bidding on bankrupt bookstore chain Borders has begun. Phoenix-based private equity firm Najafi Companies will serve as the stalking-horse bidder, kicking off the court-supervised auction with a bid of $215.1 million plus the assumption of about $220 million worth of liabilities.
Once the auction begins, other companies–including Gores Group, the Los Angeles-based private equity firm that originally expressed interest in buying about half of Borders’ remaining stores–may bid as well. The auction is scheduled to take place by July 19, with a sale wrapping up by July 29. If an agreement is not reached, Borders will use liquidators Hilco and Gordon Brothers to close it down. Hilco and Gordon Brothers also agreed to liquidate any stores Najafi doesn’t buy.
Borders Group president Mike Edwards said, “We are pleased to take another important step forward as we position Borders for a vibrant future and sustainable earnings growth. Since the filing, we have made significant progress in reducing our cost structure, refocusing our merchandise offering, and building our eBook business. We look forward to working with a supportive partner as we continue to execute on our turnaround strategy.”
Borders filed for bankruptcy in February and has closed a third of its stores; about 400 stores remain. Borders recently reached an agreement with its lenders that allowed it to avoid closing about 50 more stores.