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Thursday, June 9, 2011

The Vultures are Circling

Najafi said to be seeking to skim the cream from the Borders chain

The Wall Street Journal says that the Arizona-based private-equity firm Najafi has joined negotiations as a potential acquirer of some significant portion of Borders 265 superstores.  This means it is in competition with the Los Angeles-based Gores Group, which has already expressed interest in buying some of the stores.

Najafi's apparent intention is to acquire the website and customer lists. As Publishers Lunch comments, this would strip the profit-making operations from the chain, leaving many Borders and Waldenbooks stores to flounder and founder.

Founded by Jahm Najafi in 2002, the company has speculated in books already, having acquired a direct marketing operation that sells books and music, plus several Book of the Month clubs.

Both Najafi and Gores Group specialize in turning a profit out of distressed companies.

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