Johnson buys up Borders book shops

Luke Johnson, the entrepreneur and chairman of Channel 4, has made a £20m acquisition of Borders and Books etc through his private equity vehicle Risk Capital Partners (RCP).

The 70 stores, in the UK and Ireland, were originally thought to be worth £50m when Merrill Lynch put them up for sale. Borders, America's second-largest book retailer, made the decision to dispose of its UK stores following a review of its international operations. It entered Britain 10 years ago, paying an estimated £40m for London's Books etc chain. It is thought to have invested around £120m in 41 Borders stores, all of which have Starbucks coffee shops. The US group will retain a 17 per cent share in the business.

Other bidders are believed to have included the Virgin Group, Tim Waterstone, founder of the Waterstone's chain, and the former Hammicks managing director Trevor Goul-Wheeker.

The relatively low price is believed to reflect internet and supermarket competition.