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Bookseller A&R Whitcoulls expects to make no major changes to the Borders retailing format following its acquisition of the Australasian and Singaporean stores in a deal worth as much as A$110 million ($137 million).
Private equity-owned Whitcoulls is purchasing 30 Borders stores in New Zealand, Australia and Singapore from its embattled US-based parent company Borders Group. It will get exclusive rights to the Borders trademark in the three countries.
The deal already has the approval of the Commerce Commission, and is understood to not need the green light from the Overseas Investment Office.
A&R Whitcoulls managing director Ian Draper said it was very much business as usual for the five New Zealand Borders stores.
The deal, which is expected to be finalised early next week, is understood to give Borders Group an initial lump-sum payment of around A$90 million, with a performance-dependant payment of up to A$20 million to be paid out over a number of years.
Draper said the acquisition creates a strategic footprint for the group, and provides a foundation for growth.
"The combined experience, skills and scale of the enlarged group will create a platform for an expanded and more diverse customer offering across a number of strong brands."
The Borders management team and staff will remain, he said.
"Both businesses are looking at continued expansion in the market place and that won't change going forward.
"Whitcoulls is well-represented in all the CBD areas, and what we'll be continuing to do is look at some of the smaller towns in New Zealand where we've been successful like Te Awamutu, Richmond and Ashburton."
It was too early to say if there were cost-savings to be achieved from the deal, he said.
Borders managing director John Campradt said with three stores opened in New Zealand last year, the focus was on bedding them down before looking at future opportunities.
"From Borders' perspective, we see that the New Zealand marketplace has space for that high-end demographic serious book store."
The A&R Whitcoulls Group - owned by Pacific Equity Partners - operates the Whitcoulls and Bennetts Tertiary stores in New Zealand, and the Angus & Robertson bookstore chain in Australia.
Independent bookstore owner Tom Beran, of The Booklover in Takapuna, is waiting to see what the group does in terms of discounting and special offers for its merchandise, and how aggressive that becomes.
STORY SO FAR
* US-based Borders Group announced it was seeking to divest its Australian and New Zealand assets nearly a year and a half ago.
* A&R Whitcoulls - owned by private equity group Pacific Equity Partners - was named the preferred bidder last September.
* Talks foundered in March after an agreement could not be reached on the cash-and-shares arrangement that would have seen Borders take a substantial stake in A&R Whitcoulls.
* But parent company Borders Group suspended its quarterly dividend soon after amid liquidity concerns.
* Talks between A&R Whitcoulls and Borders resume again in private.
* The deal announced yesterday sees A&R Whitcoulls acquire the 30 Borders stores in New Zealand, Australia and Singapore for what is understood to be an initial lump-sum payment of A$90 million, and a performance-dependent payment of up to A$20 million over a number of years.
