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Borders® Reaches Agreement to Sell Australia/New Zealand/Singapore Businesses to A&R Whitcoulls


Total transaction valued at up to $110M (AUD) and expected to close next week

ANN ARBOR, Mich. — Borders Group, Inc. (NYSE: BGP) today announced that it will sell 100 percent of its Australia/New Zealand/Singapore businesses—which include 30 Borders superstores—to 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.

Upon closing of the transaction, Borders Group will receive proceeds of approximately $95 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.

As part of the agreement, ARW, which owns and operates over 260 stores including Australia’s 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 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. “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.”


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