Retailers, consumers and prices
Check Out Line: Betting on Borders
Check out who’s making a bet on Borders, the struggling bookseller.
Financier Bennett LeBow, chairman of tobacco holding company Vector Group Ltd, is buying 11.1 million Borders shares through a company he controls — making him Borders’ single largest shareholder.
Borders CEO Mike Edwards praised LeBow’s turnaround prowess- fair enough. If you can help tabacco companies, you can probably help any ailing company.
Borders said it would use some of the money from LeBow to raise its profile in the fast-growing electronic books market. The No. 2 specialty bookstore chain expects to debut its e-bookstore, powered by Kobo in June. Kobo’s reader which will prominently feature Borders’ ebookstore, faces fierce competition from the likes of Amazon’s Kindle, Apple’s iPad and Sony’s Reader.
LeBow stepped in a few weeks after the bookseller repaid a $42.5 million loan to Bill Ackman’s Pershing Square Capital Management, which owns 10.6 million shares and had been Borders biggest investor prior to LeBow’s invesment.
Last week, Ackman told Reuters that Borders was still not “out of the woods” and questioned whether there was room for two national specialty bookstore chains in the United States.
Former Pershing partner Richard McGuire is resigning from the Borders’ board, which helps make room for Lebow and Vector Chief Executive Officer Howard Lorber.
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