Borders unit attracts trade, private equity interest

MELBOURNE (Reuters) - Bookseller Borders Group Inc. (BGP.N) has had strong interest in the planned sale of its Australian and New Zealand operations from trade and private equity firms, sale advisors KPMG said on Monday.

KPMG corporate finance executive director Luke Lawrentschuck said an information memorandum will be sent out by the end of July and the sale would probably take three or four months to complete.

"It has attracted a lot of interest from parties in Australia and overseas, including trade and private equity," Lawrentschuck told Reuters, adding that Borders' Australian and New Zealand operations were performing very well.

Borders, the second-largest U.S. bookstore chain, said in March it would consider selling most of its overseas stores as it focuses on its loss-making U.S. operations.

Its losses widened in the three months to May 5, with U.S. comparable store sales down 1.9 percent and sales down 2.5 percent in its UK, Ireland, Australia and New Zealand operations.

Borders has 20 stores in Australian and four in New Zealand, with three more due to open by the end of the year.

For the year to February, Borders' international sales were $650 million, with the UK and Ireland accounting for about 70 percent of that. That implies Australian and New Zealand sales were about A$195 million.

A source told Reuters in May that private equity firm Pacific Equity Partners (PEP) had expressed interest in the Australian business, saying it would be a sensible acquisition.

PEP already owns the bookseller A&R Whitcoulls, which operates the 180-store Angus & Robertson bookstore chain and Whitcoulls bookstores in New Zealand.