MAIN NEWS HEADLINES
June 12 – June 19, 2008 Edition
Sale of Some Foreign
Units to A&R Whitcoulls
ANN ARBOR, Mich./6/10/2008Borders Group, Inc. (NYSE: BGP) has closed the sale of 100 percent of its Australia/New Zealand/Singapore businesseswhich include 30 Borders superstoresto A&R Whitcoulls (ARW), the leading Australasian retailer of books and related products owned by private equity firm Pacific Equity Partners (PEP). The total transaction is valued at up to $110 million and is expected to close next week.
With the closing of the transaction, Borders Group received proceeds of approximately $90 million (AUD) or approximately $90 million (USD based on current exchange rates). Additional deferred payments of up to $15 million (AUD) or approximately $14 million (USD based on current exchange rates) will be paid to Borders Group on or about March 31, 2009 if certain performance targets are achieved.
Just last week, Borders announced an aggressive plan to cut $120 million in expenses, laying off 156 people at its Ann Arbor headquarters and another 118 corporate costs outside its headquarters.
As part of the agreement, ARW, which owns and operates over 260 stores including Australias oldest bookstore chain, Angus & Robertson, as well as popular New Zealand book, magazine and DVD retailer Whitcoulls, among other holdings, will have the right to use the Borders brand throughout Australia/New Zealand/Singapore consistent with a brand licensing pact that is part of the agreement.
These businesses have performed well led by a talented management team who has consistently delivered strong execution in Borders superstores in Australia, New Zealand and Singapore, said Borders Group Chief Executive Officer George Jones. 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. ARW is a well respected and highly successful retail company with outstanding leadership that will be strengthened with the addition of the local Borders executive team and our stores. We trust A&R Whitcoulls to successfully manage the Borders brand.
A&R Whitcoulls Group Managing Director, Ian Draper, said that the Borders assets are complementary to his companys 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. Now, we enter an exciting new chapter as part of ARW, which has welcomed our management team, our stores, and our people, and will provide the support we need to drive profitable growth.
Borders Group, Inc., headquartered in Ann Arbor, Mich., is a leading global retailer of books, music and movies. Through its subsidiaries, Borders Group employs approximately 30,000 people and operates over 1,100 stores worldwide, as well as the newly launched Borders.com. More information on the company is available at www.borders.com.
A&R Whitcoulls is a leading book and stationery retailer in Australia and New Zealand. A&R Whitcoulls currently operates four divisions: Whitcoulls stationery chain, Calendar Club, a chain of specialty calendar stores; Angus & Robhertson, a nationwide book store chain in Australia, and Supanews, a joint venture that operates newsagencies in Australia.
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