There have long been rumors of a sale/merger of Borders and Barnes and Noble. Analysts have commented on more than one occasion that this made sense. I think publishing folks generally dislike this notion across the board. Consolidation doesn’t help sales and it certainly doesn’t help midlist authors.
But according to the Washington Post, Borders is considering putting itself up for sale. It’s not clear from the article whether Borders is going to sell part of its business or all.
Borders, the nation’s second-largest bookseller, said Thursday it may put itself up for sale and has lined up $42.5 million in financing to help the chain continue operations.
This is certainly a development that could have far reaching outcomes not the least of which would be the increase of power by Amazon in the marketplace.
Via JMC.
I read an article from CNN and it looks like Borders is getting $42.5 million from Pershing Square Capital Management, but I don’t think Borders has enough liquidity to operate for a long time without more cash coming in. (“financially constrained” state…what could it possibly mean when credit’s drying up and Bear is sold for mere $2/share?)
Borders may file for bankruptcy to break leases, etc., a possibility raised by Goldman analyst Fassler. I wonder what that means to publishers who have accounts receivable with Borders. (I’m assuming that the big ones are going to be okay, but what about small presses…?)
Here’s my agent’s take on it.
She views it with dread. And that certainly doesn’t make me optimistic.