Borders says it might sell company

ANN ARBOR, Mich. Borders Group today reported that it is looking into the possible sale of the company or certain divisions in order to maximize shareholder value. The company said it has retained J.P. Morgan Securities and Merrill Lynch as financial advisors.

In addition, the company today announced that Borders Group has received a financing commitment from Pershing Square Capital Management on behalf of certain of its affiliated investment funds. Under the terms of the commitment, Pershing Square has made a commitment to lend $42.5 million to the company and an offer to purchase, at the company's discretion, certain of the company's international businesses pursuant to a $125 million backstop purchase commitment, in each case subject to the satisfaction of customary closing conditions.

The company today also reported that, on an operating basis, fourth quarter income from continuing operations was $84.7 million or $1.44 per share compared to $87.7 million or $1.45 per share a year ago.

"This will be a challenging year for retailers due to continued uncertainty in the economic environment," said Borders Group Chief Executive Officer George Jones. "Looking forward to 2008 and beyond, the company determined that additional capital was required to execute our operating plan, and as a result we began to explore various financing options. The current credit environment has made many of these alternatives prohibitively expensive or entirely unavailable. We are pleased to have the confidence and backing of our largest shareholder, Pershing Square, which has agreed to provide funding that gives us adequate opportunity to implement our plans this year and pursue a range of longer term solutions through the strategic alternatives review process."