NEW YORK — Borders Group, the nation’s second-largest book-store chain that once operated more than 1,000 stores, appears headed for liquidation after a judge Thursday approved its motion to auction itself off with a team of liquidators as its opening bid.
The move came after an offer made earlier this month from a private-equity investor disintegrated overnight.
Borders said it will accept bids until 5 p.m. Sunday and will give notice by Monday if no other bidder emerges.
Earlier this month, a subsidiary of Phoenix-based private-equity investor Najafi Cos. offered $215 million for the company, plus the assumption of $220 million in debt. But Wednesday, creditors objected, saying that the agreement would not prevent Najafi from taking possession of the company and liquidating it immediately for profit. Landlords also objected.
Creditors said a bid from liquidators Hilco Merchant Resources and Gordon Brothers is stronger. They believe it would pay out between $252 million and $284 million in cash.
Meanwhile, one analyst speculated that if Borders liquidates, that could spark a higher bid for its chief rival, Barnes & Noble. Financier John Malone’s Liberty Media made a $1 billion offer to buy Barnes & Noble in May.
