DOW JONES NEWSWIRES 
 

Borders Group Inc. (BGP) and its largest shareholder, Pershing Square Capital Management LP, again extended the expiration date of their agreement for Pershing Square to buy Borders' U.K.-based Paperchase gifts and stationery business for $65 million.

The deadline for the struggling bookstore chain to repay a $42.5 million loan from Pershing Square made earlier this year also was extended to April 15.

The purchase agreement originally was due to expire Jan. 15, but was extended until Monday. Borders is paying Pershing Square, the hedge-fund shop run by activist investor William Ackman, $750,000 for reimbursement of expenses and the agreement extension.

Last month, Borders ousted Chief Executive George Jones and his management team. Installed was Ron Marshall, who has a strong financial background.

The book chain, like almost all retailers, had a disappointing holiday season. But its problems stretch back considerably further. Last March, the bookseller disclosed it faced a potential liquidity crunch and put itself up for sale. Despite its weak stock price, the company couldn't find a buyer.

Borders will post its fiscal fourth-quarter results March 31.

Its shares recently traded at 54 cents, up 3.9%. The stock is down nearly 95% since September.

-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com