Book Seller Borders to Raise $25M in Private Placement of Stock and Warrants
Book retailer Borders Group said it’s raising $25 million in a private placement of common stock and warrants to improve its capital position, improve productivity in its stores, increase internet sales, and develop business partnerships.
The Ann Arbor, Mich.-based company is issuing about 11.1 million shares priced at $2.25 each, reflecting a 0.9% premium to where Borders stock traded yesterday. The offering represents an 18.7% stake in the company.
Borders is also issuing warrants to purchase an additional 35.1 million shares at the $2.25 price, subject to shareholder approval. If Borders is unable to get shareholder approval, it is obligated to issue stock appreciation rights for 35.1 million shares.
The identity of the investors was not disclosed.
Borders said it is also issuing to investor Pershing Square Capital Management contingent warrants to purchase 2.7 million shares of common stock for 65 cents each. Pershing Square is owed the warrants under the terms of a 2008 private placement by Borders of a $42.5 million non-convertible term note.
Pershing also will be entitled to receive contingent warrants to purchase an additional 8.6 million shares of Borders stock following the issuance of either the new warrants or stock appreciation rights.
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