Borders Group (NYSE: BGP) has received $25 million, representing a private purchase of 11.1 million shares of common stock at a price of $2.25 per share. According to a company press release from late last week, the purchaser is an activist fund controlled by Bennett S. LeBow. As part of the transaction, Mr. LeBow has joined the Borders Group Board of Directors as its Chairman.
Borders Group’s Interim President and Chief Executive Officer Mike Edwards commented: "Ben's investment will improve the company's capital position, and provide greater stability as we execute strategies to transform the brand…Ben brings the right combination of skills, experience, focus and fresh perspective to his role as the new Chairman of the Board of Directors. As an astute investor and business operator with a strong technology background and proven experience with driving company turnarounds, he will play an extremely important role in helping us redefine the Borders brand that is so critical to unlocking a turnaround for Borders."
The transaction has been approved by Bill Ackman’s Pershing Square Capital Management, a major Borders shareholder and activist hedge fund manager. Mr. LeBow also seeks to acquire an exercisable warrant for further stock purchases in the future, which requires shareholder approval. He is also the Chairman of Vector Group, Ltd. |
