Barnes & Noble (BKS) has decided they want no part of Borders (BGP) right now, the WSJ reports.
Borders, which put itself up for sale in March after disclosing liquidity problems, only has a market cap of $344 million, after declining 61% over the past 52 weeks. Still Barnes & Noble was concerned about two issues in particular:
- tight lending markets that likely would make it difficult to arrange the proper financing
- the long length of some of the leases that Borders has signed (i.e. that makes it harder to dump the worst Borders stores)
The synergies would have been obvious with potential cost reductions in redundancies like backroom operations and a plethora of corporate expenses. And it’s always possible BKS could return with a bid, but Borders wants a deal done by September. Considering Borders is a cash-flow business with a tiny market cap, private equity firms will surely be taking a look. But’s it’s not clear they’ll want it, either.
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