Buyout Firms Consider Bidding for Borders

Buyout firms Bain Capital Inc., Apollo Management and Blackstone Group are considering making separate bids for Borders Group Inc., the No. 2 U.S. book chain, people familiar with the planned sale said. A buyout would value the retailer at about $2 billion, given its market capitalization of $1.13 billion, a premium of as much as 30%, and assumed debt of $425 million, a source said. Borders hired Merrill Lynch & Co. in March for advice on how to boost its stock, which has fallen 70% since 1998. Its shares rose $4.44 to close at $18.50 on the New York Stock Exchange. “We’ve said all along that we’re in the process, and as soon as we have something to announce we will,” said Ann Binkley, a spokeswoman for Ann Arbor, Mich.-based Borders. Bain declined to comment, while the other two firms weren’t available for comment. Borders’ stock tumbled from a peak of $39.63 in July 1998 amid concern it would lose sales to fast-growing Internet booksellers such as Amazon.com Inc. Its shares fell to a four-year low in February.

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