Sunday, 23 October 2016
Last updated 1 day ago
Mar 21 2008 | 2:00am ET
Activist hedge fund Pershing Square Capital Management has extended a $42.5 million lifeline to Borders Group, as the country’s second-largest bookseller put itself up for sale.
The New York-based hedge fund lent the money to Borders, in which it holds an 18% stake, after the Ann Arbor, Mich.-based company was unable to obtain necessary financing from its banks, Bank of America and JPMorgan Chase.
“The current credit environment has made many of these alternatives prohibitively expensive or entirely unavailable,” CEO George Jones said in a statement. He said the company may have faced “liquidity issues” in the coming months without the Pershing Square money.
And the activist hedge fund, which also has a seat on the troubled bookseller’s board, made inject even more capital into Borders, as it is in talks to buy its Australian division and a 17% stake in its British unit for $125 million.