News Borders Removes Najafi Bid, Puts Liquidators in Lead
posted on 2011-07-14 23:55 EDT
On Wednesday evening, the American bookstore chain Borders removed the offer made by BB Brands (owned by Najafi Companies) and replaced it with a rival bid by a consortium of Borders's liquidators, including Hilco Merchant Resources and Gordon Brothers. The modification was approved at a bankruptcy hearing on Thursday morning. If the liquidators' bid goes on to succeed, then the liquidation of all Borders stores could start late next week.
Borders was responding to opposition to its previous schedule, raised by landlords and publishers. There was also an objection filed by the creditors committee, asking that BB Brands make a firm commitment to operate Borders as a going concern.
Following its removal of Najafi's bid, Borders says it is continuing to look for acquisition bids, and also for bids for a full liquidation of the company. The deadline for bids is midnight on July 17. If there is an auction, it will be held on July 19. The Hilco/Gordon Brothers group is now in the preferred "stalking horse" position, with a bid of US$215.1 million with no break-up fee.
On Wednesday, Najafi said it was disappointed in the actions of the "deciding parties," and that it had intended keeping Borders intact. Najafi also said it was ready to move forward if the "deciding parties" reconsidered. The Borders attorney held out the possibility that Najafi and BB Brands might place a going-concern bid by the deadline. The Creditors Committee attorney said that it encouraged BB Brands to come forward with a bid.
According to Publishers Weekly, if no going concern bidder comes forward by the deadline, Borders will hold a separate sale for intellectual property, leases, and other assets.
this article has been modified since it was originally posted; see change history