The sale of insolvent German department store chain Karstadt has been delayed until 9 June with three bids on the table. Administrator Klaus Hubert Goerg said in a statement that the bidders include the Highstreet consortium - which owns the majority of Karstadt’s stores, German-Swedish financial investor Triton and private equity firm Berggruen Holdings. The deadline for the sale was extended in a meeting between Karstadt's insolvency and the retailer's creditors on 28 May.
The sale of insolvent German department store chain Karstadt has been delayed until 9 June with three bids on the table. Administrator Klaus Hubert Goerg said in a statement that the bidders include the Highstreet consortium - which owns the majority of Karstadt’s stores, German-Swedish financial investor Triton and private equity firm Berggruen Holdings. The deadline for the sale was extended in a meeting between Karstadt's insolvency and the retailer's creditors on 28 May.
An unnamed Russian investor contacted Arcandor over the weekend to express interest but has not yet submitted a formal bid, according to Arcandor spokesman Thomas Schulz.
The Highstreet consortium - which is widely regarded as the most likely buyer because of its existing ties to Karstadt - comprises Goldman Sachs' Whitehall Funds (51%), Deutsche Bank's RREEF funds (24%), Milan-based Pirelli Real Estate (12%), Generali (11%) and the Borletti Group. Together, they own a portfolio of 95 properties occupied by Karstadt including 45 Karstadt stores, as well as around 50 Karstadt car parks, offices and logistics properties throughout Germany. Highstreet spokesman Mirko Wollrab told PropertyEU on 28 May that Highstreet had submitted a bid that morning, ahead of the creditors committee meeting
German-Swedish financial investor Triton and Berggruen Holdings also submitted bids in May. However, Triton said earlier that it would pull out of its conditional bid for insolvent German retailer Karstadt unless Germany’s largest union Verdi agrees to make some changes to the insolvency agreement, Triton spokesman Max Hohenberg told PropertyEU.
‘We are not making any headway with Verdi yet,’ he said. ‘We want to renegotiate the insolvency tariff agreement between Arcandor and Verdi. If we can’t do this, we might have to pull out of the bid,’ he said.
Under the insolvency plan, Karstadt employees have agreed to a pay cut of 8% over three years, which would save EUR 150 mln over the time period, said Hohenberg. Under the existing agreement, this money is due to be repaid to employees in 2013, he said. Triton is requesting the payback period to be tied to turnover and revenue. ‘If the figures are good, employees could be paid back more quickly and even receive more than expected. If the figures are less good, we would like to cap it at 8%,’ he added
In addition, Triton wants more flexibility with regard to setting rents and is currently talking to Highstreet on the rental side, Hohenberg added. Karstadt rents its stores in Germany, many of which are owned by the Highstreet consortium. Together, they own a portfolio of 95 properties occupied by Karstadt including 45 Karstadt stores, as well as around 50 Karstadt car parks, offices and logistics properties throughout Germany.
Thomas Schultz, a spokesman for Karstadt administrator Klaus Hubert Görg, told PropertyEU in early May that Triton was their ‘preferred bidder’ but admitted that negotiations with Verdi were ‘challenging’. Arcandor had initially hoped to sign a deal by the end of May, Schultz said, a timeline Hohenberg described as ‘ambitious’.
The full article appears in the June edition of PropertyEU Magazine. Click on the link below to subscribe