Apparently after proceeding through several rounds of regulatory review, Pacific Equity Partners the owner of New Zealand retailer Whitcoulls and Australian retailer A&R has backed out of the deal to buy the Borders stores in Australia. It seems that PEP shareholders aren't comfortable with the part cash part equity deal that would have had them partner with Borders in a potentially larger retailing group. This seems to be a strange turn-around for Borders that they would be even negotiating an equity/cash deal with a potential purchaser when they have seemed intent on running for the hills from any international entanglements. Perhaps, Borders has a much more expansive notion of the value and prospects for the Australian & NZ Borders stores and their pricing was not reflected in all cash offers. This could have set them down the road to consider an equity and cash deal.
The Age notes Whitcoulls as saying they were "comfortable negotiations had reached a natural conclusion." I doubt that is the same sentiment in Ann Arbor where they have made international retrenchment a focus. The company releases their full year numbers in a week but here is what they said about the international operations in their most recent (holiday period) release:
Total International segment sales from continuing operations for the period, at $109.3 million, increased by 36.3% compared to last year. Excluding the impact of foreign currency translation, total segment sales from continuing operations would have increased by 26.9% over the same period last year. Comparable store sales for International increased by 10.8% over the same period last year driven by strong performance in Australia.
So far no word from Borders.
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