Borders Group and Pershing Extend Deadline

Should give shareholders some hope.

 Borders Group, Inc. (NYSE: BGP) today announced an agreement with Bill Ackman's Pershing Square Capital Management, L.P. on behalf of its affiliates, to extend the expiration date of the previously announced Borders option to "put" its U.K.-based Paperchase gifts and stationery business to Pershing Square for $65 million, subject to certain conditions. The "put" was due to expire Jan. 15, 2009, but has now been extended until Feb. 16, 2009. At the same time, the deadline for repayment of the $42.5 million senior secured term loan, which was originally payable to Pershing Square by Borders on Jan. 15, 2009, has also been extended to Feb. 16, 2009. Other terms of the "put" option and the term loan remain unchanged except that the approximately $1 million loan repayment premium that Borders is required to pay Pershing upon repayment of the $42.5 million loan remains due no later than Jan. 15, 2009.

Earlier it was rumored Barnes and Noble (NYSE:BKS) might be a buyer but that deal fizzled. Ackman owns 40% of Borders stock.