No one wants to buy Borders. It doesn't help that there's no credit available to finance a deal, if an investor were to even consider such a purchase.
Executives of the bookshop chain turned to Pershing Square Capital Management when they needed a loan to keep the doors open, with the hope that things would turn around or that someone would come along and buy up Borders. Neither event came to pass.
Pershing Square's own William Ackman, billionaire owner of 29% of Borders, exercised his right under the deal and will be able to buy another five million shares for $7 each, which isn't a bargain considering the fact that the stock closed at $6.70.
The investor is looking at the end game, in which he can force a sale that won't necessarily be kind to those who sit in the corner offices. By owning more shares, in spite of the dilution, he'll stand to gain more when Borders does finally get bought out.
Not that he's willing to wait for long, however. Mr. Ackman would like to work out a deal with Amazon.com now that Barnes & Noble displayed a lack of interest.
After that, there will be fewer brick and mortar shops where a reader can browse through every single page, if they wish, before they buy. There'll be fewer tables near the front where books are displayed, to attract a reader who might otherwise not know such a marvelous novel existed. There'll be fewer outlets for the author who's not produced a New York Times best-seller blockbuster, and that will trickle up to the publishers and the literary agents, who will seek out fewer debut authors who might have something good but no one's taking any chances.
What's left, then, if it's only the occasional Barnes & Noble, or an independent book shop if you're very lucky indeed? Fewer readers, fewer places to buy books, and it can only yield even fewer readers. Any chance that independent shops might reappear to meet the limited demand?
No comments:
Post a Comment