The Bookseller.com

2nd December 2008

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Borders sells Asia Pacific stores

05.06.08 Philip Jones

Borders has sold its Asia Pacific businesses to the Australian bookselling group A&R Whitcoulls (ARW) for about $100m(USD). The deal, which was approved earlier this year by the competition authorities in Australia and New Zealand, brings to end a sale process that has spanned more than a year, and which saw ARW walk away in March. It will be a relief for Borders, which had to borrow cash from investor Pershing Square Capital Management earlier in the year after failing to sell the businesses.

ARW will pay $90m upfront for the stores based in Australia, New Zealand, and Singapore, with a further $14m to be paid next year if the business performs well. As part of the agreement, ARW, which owns and operates more than 260 stores including Australia's oldest bookstore chain, Angus & Robertson, as well as New Zealand book, magazine and DVD retailer Whitcoulls, will have the right to use the Borders brand throughout the region.

Borders Group chief executive George Jones said: "This transaction represents an attractive valuation, permits us to forgo further investment in these businesses, and provides our company with a significant cash infusion to further reduce debt, which is one of our key financial initiatives."

A&R Whitcoulls group managing director Ian Draper said that the Borders assets were complementary to his company's existing holdings, offering a different yet enhanced shopping experience to Angus & Robertson in Australia and Whitcoulls in New Zealand. "Borders will bring a new dimension to our retail offerings," he said. "The customer-experience based model invites shoppers to browse with a vast range of books, music, movies and cafes in Borders stores. This model has proven popular in the local market and will complement our existing presence by targeting a different demographic through the premium format and vast selection of products."

Managing director of Borders Asia Pacific John Campradt will continue to serve in his current role managing the Borders business. "Building the Borders brand throughout Australia, New Zealand and Singapore has been fulfilling," he said.

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