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Borders is issuing warrants for Pershing Square, which owns 29% of Borders, to own up to an agreement signed in April, according to a Reuters report. The agreement was that if the bookstore did not find a buyer by a prearranged deadline, Pershing would buy an additional 5.15 million shares of common stock on Oct. 1.
In April, while Borders' strategic review was under way and the second-largest shareholder Barnes & Noble Inc. weighing a bid for the company, Pershing Square made a $42.5 million senior secured loan to the company and acquired 9.55 million warrants to purchase common stock at $7 a share. The hedge fund, which had been pressing the company to sell some of its overseas businesses, also gave Borders a put option to sell those assets to Pershing for $135 million. Barnes & Noble decided not to acquire Borders and crossed it off of its reading list in August. - Maria Woehr Dealscape: As Borders shops itself around, a look at its foray into stationaryDealscape: Borders slashes work force Categories Deal Video
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Borders Group Inc. is telling activist investor Pershing Square Capital Management LP's William Ackman to sign on the dotted line.
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