The fate of the Borders franchise has been up in the air since they filed for bankruptcy earlier this year. There have been several interested parties crunching numbers to negotiate a deal to buyout the franchise. The potential buyer would have to assume nearly $220 million in debt liabilities and work diligiently to keep the remaining stores in operation. In June, a deal was reached between the Borders Group and the Najafi Company to purchase the chain at $215 million. As of late Wednesday, the deal is no longer on the table.
Backing Out Of The Deal
Najafi, a private equity investment group that focuses on long-term investments, was the winning bid back in June. What happened? Members on both sides are keeping quiet about the details of the backout, but many are speculating about the potential cause of the deal breaker. Fingers are being pointed at both Najafi and back at the Borders Group, but one thing we do know, everyone was worried about liquidation. The original deal was arranged with the hopes that the buyer would buyout the company and keep it in operation. With nearly 339 stores and 11,000 employees, the Borders group felt the option for liquidation was a last resort.
There aren’t many other bidders coming forth with offers at the moment. There are, however, a group of liquidators standing by looking to win next week’s bankruptcy-court auction. Not all hope is lost; the company remains hopeful that the right bidder will come along and save them from liquidation. Borders President, Mike Edwards informed his employees that Najafi had withdrawn their bid for the company. In a letter to his employees, he stated he remained hopeful other suitors would emerge to keep Borders in business before next week’s auction.