Ann Arbor, Mich. -- Borders Group announced Thursday that it has agreed to sell itself to Najafi Cos. for $215 million. The deal is subject to court approval.
Najafi Cos. is a Phoenix-based private investment company, which owns the Book-of-the-Month Club.
The "stalking horse" bid will open an auction for the company and its assets, so a higher bid is possible, according to reports.
A bankruptcy court hearing on the deal is slated to be held on July 21. Borders has filed a separate motion to liquidate should the court not approve an auction. Its assets would be sold by a joint venture led by liquidation firms Hilco and Gordon Brothers.
Borders said in a statement that a sale provides the "best path forward to reposition the business for a successful future and to maximize value for the company's stakeholders."
Under terms of the deal, in which Najafi Cos. will also assume $220 million in debt, Borders will become part of the same business unit that owns, beside the Book-of-the-Month Club, Doubleday Book Clubs and Columbia House.
Najafi Cos. currently has investments in restaurant chain Pasta Pomodoro as well as the NBA’s Phoenix Suns basketball team, for which CEO Jahm Najafi serves as vice chairman.
Borders said it expects the sale process will be complete by late July.