Former Karstadt CEO joins chase for Kaufhof chain

Wolfgang Urban, the former chief executive of collapsed retail group KarstadtQuelle has entered the race to take over German retailer Metro Group's Kaufhof department store chain, joining Austrian private real estate firm Signa, and billionaire Nicolas Berggruen.

The German entrepreneur has lined up a consortium of wealthy German families to take control of Kaufhof, according to a news report in Bild am Sonntag, which was confirmed by Metro.

The news comes shortly after Metro said last week that it was holding separate talks with two investors, Greek shipping tycoon George Economou through Signa, and Nicolas Berggruen, the billionaire owner of the bulk of Karstadt department stores in Germany. The Kaufhof business is worth between EUR 2 bn and EUR 3 bn with the company owning half of its roughly 140 stores.

Discussions are believed to be at an early 'exploratory' phase.

Economou has placed an indicative EUR 2.4 bn bid for Kaufhof while the details of Berggruen's offer were not disclosed. Urban is believed to be seeking to buy 51% or even 100% of the company.

Metro initially announced plans to sell its Kaufhof non-strategic unit in 2008 but the divestment was put on hold amid the financial crisis and a failed attempt to merge Kaufhof with the Karstadt department store chain. A separate attempt to sell the Kaufhof unit was launched in early 2010. In September last year, Berggruen acquired Germany's insolvent department-store chain Karstadt, after several months of protracted wrangling over lower rents and debt restructuring.