The US bookstore and music chain, Borders, which has been plagued by poor holiday sales, has said it will explore putting itself up for sale.

The company is also persisting with the sale of its Australasian operations despite the failure at the 11th hour to sell the business to A&R Whitcoulls.

 
Despite a $US42.5 million loan commitment from shareholder Pershing Square Capital Management that will allow the company to operate through to the end of this year and into next year, CEO George Jones says further funding is needed.

He also said that while a sale might be good for the company, it was not the only option.

Today's Australian Financial Review reports that alongside the $US42.5 million high interest loan, Pershing Square might also buy Borders' Paperchase, Australian, New Zealand and Singaporean business for $US125 million via a "backstop purchase offer" that Borders has the right to trigger until January 15 next year.

Borders said the backstop offer gave it some flexibility to pursue its strategy but the businesses were worth substantially more.

Meanwhile, the company has blamed tough credit markets for the failure of the sale of the Australian operations to A&R Whitcoulls, owned by Australian private equity group, Pacific Equity Partners.