Borders has amended a deal to potentially sell certain U.K.-based businesses to Pershing Square Capital Management to clarify that its 17% stake in Bookshop Acquisitions isn't included in the transaction. Pershing Square, run by activist William Ackman, will allow Borders to "put" its stake in U.K.-based Paperchase Products to Pershing Square for $65 million, subject to certain conditions. The Borders put expires on Feb. 16. Pershing Square holds 25,297,880 shares (33.6% of the total outstanding).

Value

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William Ackman's Pershing Square Capital Management reported holding 6.86 million shares (11.7%). Ackman said the company has sought his views on corporate-governance matters, including the composition of its board

And finally, we have Borders making this week’s list. The company's president
and CEO, George Jones, purchased 50,000 shares of the book-store chain for $13.33 to $13.42 apiece.

On top of the CEO purchase, Boarders' Board of Directors recently declared a quarterly dividend worth 11 cents a share. The dividend is payable October 26, 2007 to shareholders of record at close of business October 12, 2007.

Wednesday, Borders' stock fell to $12.07, its lowest price since January 2001. Consecutive quarterly losses have dragged the stock down 34% year to date. Mr. Jones’ $667,938 transaction is even more interesting seeing as it’s the first time he's purchased stock since joining the company in July 2006. With this purchase he now owns 121,184 shares. So we like to see that the CEO believes the stock is cheap, and is willing to put his own money on the line.

Spencer Capital asked the book retailer to add a person designated by Spencer to its board. Spencer holds 4.63 million shares (7.9%).

Turnaround/Value pick

Goldman Sachs said it is upgrading Borders Group (BGP) to Neutral from Sell due to recent underperformance by stock as well as Thursday's court decision in favor of WKMI/Wild Oats merger. Ruling clears nominal barrier to consolidation. Price target at $16.

From Barron's 7-16-07:

"Spencer Capital Management boosted its holdings to 4,008,101 shares (6.8%) by buying 2,358,901 from June 21 to July 2 at $19.05 to $19.81 per share."

spike in volume last week could indicate that Borders will report good number on Tuesday. Barnes and Noble's strong revenue growth was a good indicator.

Made money on this one and learned my lesson about retail...

Overvalued