Borders Group and Pershing Square Agree to One-Year Extension of Loan Agreement

ANN ARBOR, Mich., March 30 /PRNewswire-FirstCall/ -- Borders Group, Inc.
(NYSE: BGP) and Pershing Square Capital Management, L.P. today announced a
one-year extension of the $42.5 million senior secured term loan from April
15, 2009 until April 1, 2010. The loan will be extended on its current
terms, including an interest rate of 9.8%, which is substantially below market
for comparable financing. At the same time, Borders Group is resetting the
strike price on Pershing Square's 14.7 million warrants to $0.65 per share,
and the company will allow its option to "put" its U.K. based Paperchase gifts
and stationery business to Pershing Square to expire.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060208/BORDERSGRPLOGO)

"We are pleased to have the continued support of our largest shareholder as we
focus on getting our company's financial house in order," said Borders Group
Chief Executive Officer Ron Marshall. "The extension of the loan gives us some
necessary breathing room, which is important in the current economic
environment. We are also pleased to retain Paperchase, which is a successful
and important business throughout the U.K. and other markets as well as in our
Borders superstores throughout the U.S."

About Borders Group, Inc.
Headquartered in Ann Arbor, Mich., Borders Group, Inc. (NYSE: BGP) is a
leading retailer of books, music and movies with approximately 25,000
employees. Through its subsidiaries, the company operates more than 1,000
stores worldwide primarily under the Borders(R) and Waldenbooks(R) brand
names. For online shopping, visit Borders.com. For more information about the
company, visit www.borders.com/aboutus.

Safe Harbor Statement

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. One can identify these
forward-looking statements by the use of words such as "projects," "expect,"
"estimated," "look toward," "going forward," "continue," "maintain,"
"planning," "returning," "guidance," "goal," "will," "may," "intend,"
"anticipates," and other words of similar meaning. One can also identify them
by the fact that they do not relate strictly to historical or current facts.
These statements are likely to address matters such as the company's future
financial condition and performance (including earnings per share, gross
margins and inventory turns, liquidity, same-store sales, cost reduction
initiatives, and anticipated capital expenditures and depreciation and
amortization amounts) and its cost reduction initiatives and the benefits
thereof. These statements are subject to risks and uncertainties that could
cause actual results and plans to differ materially from those included in the
company's forward-looking statements.

These risks and uncertainties include, but are not limited to, consumer demand
for the company's products, particularly during the holiday season, which is
believed to be related to general economic and geopolitical conditions,
competition and other factors; the availability of adequate capital-including
vendor credit-to fund the company's operations and to carry out its strategic
plans and the performance of the company's information technology systems and
the development of improvements to the systems necessary to implement the
company's strategic plan.

The company's periodic reports filed from time to time with the Securities and
Exchange Commission contain more detailed discussions of these and other risk
factors that could cause actual results and plans to differ materially from
those included in the forward-looking statements, and those discussions are
incorporated herein by reference. The company does not undertake any
obligation to update forward-looking statements.

SOURCE Borders Group, Inc.

Investor: Mark Bierley, +1-734-477-4105, or Media: Anne Roman,
+1-734-477-1392, both of Borders Group