Ann Arbor, Mich. After failing to find a buyer, Borders Group Inc. has been forced to issue warrants to Pershing Square Capital Management, giving its biggest shareholder even more control over the company.
In March, Borders said it would put itself up for sale as part of a larger financial restructuring plan. According to U.S. Securities and Exchange Commission filings, if the company didn't sign an agreement by Wednesday or abandoned its plans, it would have to issue warrants to Pershing.
Borders on Wednesday issued warrants to purchase an additional 5.15 million shares at $7 each up until Oct. 9, 2014.
Pershing is run by billionaire hedge-fund manager and activist investor William Ackman. It currently owns 20.1 million shares of the company, or nearly 29% of outstanding stock.