Court gives Karstadt investor more time to finalize takeover

Judges in Essen have extended the deadline for Nicolas Berggruen to finalize the takeover of the insolvent Karstadt department store chain until 3 September, due to ongoing negotiations with creditors. It is the third extension Berggruen Holdings has received.
Likening the protracted negotiations to a ‘game of Monopoly’, administrator Klaus Hubert Görg said in a statement that ‘the period of negotiating, hesitating and blocking has got to come to an end - so that Karstadt can position itself successfully in the marketplace.’

Berggruen signed a deal to acquire Karstadt in June but creditors, which include Valovis Bank and the Highstreet consortium led by the Goldman Sachs Group, which owns the majority of Karstadt’s stores, have been digging in their heels. Highstreet has agreed to slash rents by EUR230 mln over the next five years, according to Highstreet spokesman Richard Speich. Highstreet will also stump up EUR160 mln for renovations. However, Berggruen is reportedly looking to slash rents further, according to those who track the market.

If a deal cannot be reached, Karstadt could be liquidated. Highstreet said in June that a liquidation was likely if an agreement on rents did not emerge soon. Berggruen has said that he wants to save the 25,000 jobs at stake but has demanded further concessions.