Borders Group Inc. (Ann Arbor, Mich.) has received a $25 million investment from Bennett LeBow, financier and Vector Group Ltd. chairman. Though the deal, LeBow will become chairman of the bookseller and Howard Lorber, president and chief executive of Vector, will join Borders's board, according to The Wall Street Journal.
Richard McGuire has resigned as Border's chairman and left the board.
The book retailer reports that LeBow agreed to buy 11.1 million shares at $2.25. The investment is aimed at strengthening the company's balance sheet and boosting its e-book sales efforts. LeBow also received warrants to buy 35.1 million shares at $2.25 each, according to The Journal, giving him 15 percent of shares outstanding and the chance to increase his stake to 35 percent with exercise of the warrants.
Interim Borders ceo Mike Edwards says LeBow’s involvement will play an important role in helping redefine the brand. In March, the company announced its fiscal fourth-quarter revenue dropped 13 percent.