DOW JONES NEWSWIRES
Borders Group Inc. (BGP) announced that shareholders have approved two measures that stand to increase Chairman Bennett LeBow's grip on the struggling bookseller.
Shares rose 5% after-hours to $1.25. The stock through the close was down 62% the past year, all occurring in late 2009.
Holders backed proposals to issue warrants exercisable into 35.1 million shares and give an entity LeBow controls veto power on changes to any executive officer post.
The meeting for the vote was set for Wednesday, but postponed a day as enough people hadn't voted yet to have a quorum. At the time, President Mike Edwards said in a statement that support for the stock-issuance proposal has been "strong."
The warrants have a $2.25 exercise price. Borders had about 65 million shares outstanding as of July 31.
The measure was related to a transaction announced in May, in which LeBow, also a noted financier and chairman of Vector Group Ltd. (VGR), invested $25 million in Borders and was given control of the board. William Ackman's Pershing Square Capital Management LP, then the largest single investor in Borders, supported the transaction.
LeBow's investment has propped up the No. 2 U.S. bookstore operator, which has struggled amid sliding sales and margins.
-By Kevin Kingsbury; Dow Jones Newswires; 212-416-2354; email@example.com