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Borders and Barnes & Noble Might Merge

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Now here's an interesting approach to the problems battering traditional booksellers--a merger of the sector's two behemoths, Borders and Barnes & Noble. Reports emerged yesterday that Bill Ackman, one of Borders' largest shareholders (he has also made a name for his investments in GGP, Target and J.C. Penney), has offered to finance a $960 million takeover of Barnes & Noble.

The thinking seems to be that a merger would allow the booksellers to benefit from economies of scale. Barnes & Noble's shares surged 29 percent when news of the potential acquisition reached the markets.

But some analysts question whether a merger would offer any permanent solutions to the booksellers' woes. The biggest threat facing bricks-and-mortar book chains today are e-readers and it's not yet clear how combining forces would help fight competition from Amazon.com, Google and Apple.

In any case, if Borders and Barnes & Noble do end up merging, there will likely be a major portfolio overhaul. We'd love to hear from all of you what you think of this proposal. Does a merger make sense? Will it help save Borders? What will be Bill Ackman's game plan if he ends up with the largest bookstore chain in the U.S?

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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