How ambitious is Heather Reisman?
The CEO of Indigo Books & Music has an opportunity to snap up the No. 2 U.S. bookstore chain, as troubled Borders Group, Inc. went on the block Thursday.
Borders, which has been losing ground to Amazon, mass-market retailers such as Wal-Mart and arch-rival Barnes & Noble, announced it was reviewing strategic options at the same time it lined up emergency financing.
Hedge fund Pershing Square Capital Management put $42.5-million (U.S.) into Borders, a loan that made at a hefty 12.5-per-cent interest rate. Pershing Square, run by high-profile fund manager Bill Ackman, also offered to buy some of Borders international operations for $125-million.
Borders market capitalization is just $250-million - the stock is down 79 per cent over the last year. That's well below the $300-million (Canadian) capitalization of Indigo, Canada's biggest book retailer. According to Bloomberg, Border's total liabilities are $1.8-billion (U.S.)
The question is whether the Indigo CEO, who has commanding market share in Canada, really wants to shoulder the daunting task turning around a troubled U.S. retailer. Ms. Reisman could not be reached Thursday for comment.
Ms. Reisman knows Borders well, as she attempted to lead the chain's expansion into Canada in 1996, a move that was blocked by the federal government. Ms. Reisman moved on by starting Indigo, then taking over rival Chapters in 2001.
J.P. Morgan and Merrill Lynch are handling the Borders' strategic review.
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David Simon from Canada writes: Might be a good place to store all those CD's Chapters can't sell.
- Posted 21/03/08 at 5:05 PM EDT | Alert an Editor | Link to Comment
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