You are viewing this article in the archives. For the latest breaking news and updates in Ann Arbor and the surrounding area, see
Posted on Mon, Dec 6, 2010 : 5:07 p.m.

Borders and Barnes & Noble, together at last? Experts skeptical

By Nathan Bomey

The concept of Ann Arbor-based Borders Group Inc. acquiring Barnes & Noble, resulting in a single super-sized book store chain with increased purchasing power and a competitive edge in the marketplace, is drawing skepticism from industry experts and media.

New York hedge fund manager Bill Ackman filed a document with the Securities and Exchange Commission saying he'd be willing to help Borders finance an acquisition of Barnes & Noble. Investors applauded the prospect of a deal, sending both stocks skyward.

But several experts expressed skepticism for several reasons. Here's a roundup of the reaction to the proposed deal:

Wall Street Journal: The Deal Journal blog suggests there are "three huge problems" with the proposed merger -- the long-term financial problems of both retailers, Ackman's financial interests and a reluctance of Barnes & Noble founder Len Riggio to loosen his grip on the company. Publishing industry writer Sarah Weinman says the acquisition bid was implausible and would fail. "In the end, Borders making a play for B&N makes sense only if you prefer your business news to resemble a reality TV show. It's not a serious overture, and even if it is, it would be difficult, and not economically feasible, for B&N to accept a bid from a company they've repeatedly said no to in the past," Weinman writes.

Borders concept store.JPG

Borders and Barnes & Noble would merge under a shareholder's proposal.

Photo by Lon Horwedel |

Bloomberg: Standard & Poors analyst Michael Souers says Borders would be too big of a burden for Barnes & Noble to bear. "The cost of reducing stores and head count would be prohibitive," Souers says.

Fortune: Term Sheet writer Dam Primack suggests that the fact that's stock didn't flinch on news of the merger indicates that "Amazon shareholders no longer consider Borders and Barnes & Noble to be serious competition ... whether alone or together."

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Tue, Dec 7, 2010 : 11:41 a.m.

I think it's time for Border's to admit they are a failed company, give it up, hold their going out of business sale and quietly go away.

Macabre Sunset

Tue, Dec 7, 2010 : 3:28 a.m.

I'm afraid the writing is on the kindle for big box bookstores. No volume of custom-made fuzzy toy bears can eclipse the fact that it's simply more convenient and cost-effective to shop for books online.


Mon, Dec 6, 2010 : 8 p.m.

This "story" does not contain even a shred of original reporting or facts in it. What do local experts say? Or maybe some former Borders brass? C'mon - this is merely a compiling not reporting.