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Karstadt Sold to Private Investor

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Reuters reported yesterday that billionaire Nicolas Berggruen, the son of a well-known art collector, appears to have won a key victory in the bidding for Karstadt, the German department store chain that collapsed a year ago. A committee of Karstadt creditors chose Berggruens bid over

Karstadt Sold to Private Investor

ESSEN, Germany – Reuter reported yesterday that billionaire Nicolas Berggruen, the son of a well-known art collector, appears to have won a key victory in the bidding for Karstadt, the German department store chain that collapsed a year ago. A committee of Karstadt creditors chose Berggruen’s bid over rival offers from German-Swedish financial investor Triton and the Highstreet consortium, owned by Goldman Sachs, Deutsche Bank and Pirelli Real Estate.

Russian businessman Artur Pakhomov had also expressed interest, but insolvency administrator Klaus Hubert Goerg said on Monday he had not received a formal bid from Pakhomov.

Berggruen, who won with a clear majority, said he wanted to make Karstadt more attractive and more interesting. He added that ” he wants to save the Karstadt brand and the 25,000 jobs at stake and is asking for further concessions from property owners, like Highstreet, which owns about two-thirds of the Karstadt store space.”

But Highstreet seems unwilling to make further concessions and said on Monday: “We will stick to the condition of our offer.” Administrator Goerg said a contract would be signed immediately with Berggruen, adding that he expects the deal to close by August. The deal still needs to be approved by the cartel office.

Karstadt department stores can be found in the center of virtually any large German city, and the chain’s collapse in 2009 made the retailer one of the most high-profile victims of the recession in Europe’s largest economy.

Parent company Arcandor AG and former owner of Karstadt imploded after management failed to extract a state bailout just after cash-strapped German carmaker Opel was rescued by the German government.

 

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