Berggruen closes on Karstadt deal

Nicolas Berggruen, the billionaire investor, is close to taking over Germany’s insolvent Karstadt department store chain after a committee of the group’s creditors voted to favour his bid over those of two rivals.

A formal contract to acquire Karstadt and the approval of a German court are set to follow this week, making Mr Berggruen’s group the owner of the chain of about 120 department stores with 25,000 employees.

Karstadt’s future has been in doubt since Arcandor, its parent company, filed for insolvency almost a year ago. The creditor committee voted by a majority for the Berggruen offer, the insolvency administrator said.

No financial details of the offer were immediately disclosed but Mr Berggruen, a German who has spoken of Karstadt’s important role in the country, has previously said that he wanted to maintain the whole of the Karstadt chain.

A spokesman for the Verdi trade union, representing Karstadt staff, welcomed the Berggruen proposal as “sustainable and fundable”.

Mr Berggruen’s offer came after six months of considering a bid for Karstadt, a spokesman for the investor said last month.

Mr Berggruen is one of the people behind the special purpose acquisition companies that have invested in recent months in Pearl Group, the life assurer, and Prisa, the Spanish media group.

Other bidders for Karstadt had included Triton, a European private equity firm, and Highstreet, a consortium led by Goldman Sachs that already owns a substantial part of the Karstadt property portfolio following a deal struck before Arcandor’s insolvency.

Department stores have been losing ground as shoppers head for specialist outlets or discount shops. Karstadt’s performance was worse than that of its rival Galeria Kaufhof, owned by Metro, the world’s third-largest retailer.