07 Dec 2010 18:49:47
Barnes & Noble Inc will offer the finance from William Ackman, that was announced on Monday.Under the deal, Pershing Square Capital Management would sponsor a bid by Borders of $16 per share for more than 60 million outstanding Barnes & Noble shares. The news sent Barnes & Noble's shares up 10.6 percent, or $1.41, on Monday to close at $14.69.
Both book sellers face increasingly tough competition from much bigger merchants online and in stores, including Amazon.com, Target Corp. and Wal-Mart Stores Inc. And both have said they are relying for growth on electronic books and readers, a still-small arena where another giant, Google Inc., launched its own bookstore Monday.
Barnes & Noble, which is based in New York, debuted its reader, the Nook, last year and has invested heavily in its electronic bookstore, while Borders sells readers and e-books on a smaller scale through a partnership with Kobo.
The financing from Ackman, who owns 37 percent of Borders' outstanding shares, would let Borders to make a "quantum leap" in the e-book space, Morningstar analyst Peter Wahlstrom said.
"It's is a sign Borders is looking to catch up," Wahlstrom said.
Borders spokeswoman Mary Davis said the company, which is based in Ann Arbor, Mich., welcomes Ackman's "participation."
"We have previously expressed to Barnes & Noble our interest in such a business combination, and we look forward to continuing those discussions," she said.
Both book sellers face increasingly tough competition from much bigger merchants online and in stores, including Amazon.com, Target Corp. and Wal-Mart Stores Inc. And both have said they are relying for growth on electronic books and readers, a still-small arena where another giant, Google Inc., launched its own bookstore Monday.
Barnes & Noble, which is based in New York, debuted its reader, the Nook, last year and has invested heavily in its electronic bookstore, while Borders sells readers and e-books on a smaller scale through a partnership with Kobo.
The financing from Ackman, who owns 37 percent of Borders' outstanding shares, would let Borders to make a "quantum leap" in the e-book space, Morningstar analyst Peter Wahlstrom said.
"It's is a sign Borders is looking to catch up," Wahlstrom said.
Borders spokeswoman Mary Davis said the company, which is based in Ann Arbor, Mich., welcomes Ackman's "participation."
"We have previously expressed to Barnes & Noble our interest in such a business combination, and we look forward to continuing those discussions," she said.
