najafi

Jennifer Guerra / Michigan Radio

It’s been a busy 24 hours for Ann Arbor-based Borders: The bankrupt bookstore chain has gone from having a potential buyer to talk of liquidation.

The auction to sell Borders is still scheduled for Tuesday, July 19th.  But the lead bidder, known as a "stalking horse," has pulled out. That bidder was Najafi, a private equity from Arizona a firm.

Lornais / Flickr

Borders has agreed to sell itself to private investment firm Najafi Cos. for $215 million, reports the Associated Press. The agreement, however, is tentative. From the AP:

Najafi, which owns the Book-of-the-Month Club, will also assume $220 million in debt.

The agreement is tentative and what is known as a "stalking horse" bid for a company under bankruptcy protection. The bid will open an auction for the bookseller and its assets, so a higher bid is possible.

A bankruptcy court hearing on the deal is set for July 21. If the court does not approve an auction process, Borders filed a separate motion to liquidate.

Najafi has been a speculative suitor for the Ann Arbor, Mich.-based company, although Borders has not previously confirmed any specific bidders.

Borders Group Inc. filed for bankruptcy protection in February.