The Bookseller.com

2nd December 2008

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Channel 4 chief in frame for Borders

28.08.07 Graeme Neill

Channel 4 chairman Luke Johnson's private equity firm Risk Capital Partners is understood to be backing David Roche's management buyout of Borders' UK and Ireland business. While the deal has not been finalised, a decision on the chain's future is believed to be imminent.

Johnson is understood to be keen to retain Borders' identity and its commitment to promoting independent publishers. Despite a difficult market for high street booksellers, Risk Capital Partners is believed to be confident that it can cut costs at Borders and turn the business around. While some closures of underperforming stores are expected if the deal goes through, it is believed that the private equity firm would retain most of Borders' 70 branches.

Despite Johnson's late emergence as a contender for control of the business, it is not the first time he has been linked with a move into the bookselling trade. When HMV Group was floated on the stock market in 2002, he was linked with a bid for Waterstone's stores.

One retail analyst suggested Johnson was a "viable" buyer for the business. "He runs a very well set up private equity firm," he said. "He's got great contacts in the City and a very good track record."

Among the properties that Johnson has taken control of is restaurant chain Pizza Express. He floated the business on the stock market at 40p in 1992, and chaired it until 1999, by which time its share price was more than 800p and it had a market capitalisation of more than £500m.

Borders UK c.e.o. David Roche has been consistently linked to a private equity-led management buyout since Borders Group announced a “strategic review” of all its international businesses in March, effectively putting the UK and Ireland business up for sale.

Merrill Lynch, which has been handling the sell off of the business, declined to comment. Borders UK also refused to comment and David Roche was unavailable. Risk Capital Partners also declined to discuss any takeover.

Borders US unveils its second quarter results later today but is not expected to announce a deal for its UK and Ireland business.

 

 

Todays Picks Borders David Roche Graeme Neill Luke Johnson