NEW YORK, July 1, 2011 (AFP) - Borders, the second largest US book store chain, said Friday it had found a bidder to purchase its assets after filing for bankruptcy earlier this year.
Direct Brands, a portfolio company of Najafi, would purchase Borders's assets for $215.1 million plus the assumption of approximately $220 million worth of liabilities, subject to bankruptcy court approval, Borders said.
The proposed deal represents a "stalking horse" bid, intended to set the bar for other interested parties. The bankruptcy court was to consider the deal on July 21, it said.
"Borders believes a sale provides the best path forward to reposition the business for a successful future and to maximize value for the company's stakeholders," the beleaguered book seller said in a statement.
It added that there would be no change to its day-to-day retail business.
Najafi Companies is a Phoenix, Arizona-based private investment firm. It acquired Direct Brands in 2008, which includes media distributors Book-of-the-Month Club, Doubleday Book Clubs and Columbia House.
Borders has shut down 200 locations since it filed for bankruptcy in February but is reportedly still bleeding revenue.
The company has lost millions of dollars in recent years as the book industry has faced online competition and struggled to make the transition from print to digital products.
In July 2010, Borders launched an online electronic book store to challenge e-readers from Amazon, Apple, Barnes & Noble and Sony in the fast-growing digital books market, but many industry analysts said the move came too late.
Stores not included in the latest deal would be closed "in an orderly manner," Borders said, without specifying the number of such stores.
Borders is not the only traditional brick-and-mortar bookseller in trouble. Last year, the money-losing number one US bookstore group, Barnes & Noble, indicated it was in discussions on a sale or other strategic options.