German retailer Douglas faces family buyout

FRANKFURT Thu Jan 12, 2012 8:50am EST

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FRANKFURT (Reuters) - The family of Douglas Holding AG DOHG.DE Chief Executive Henning Kreke aims to take the German fragrance-to-jewelry retailer private with the help of financial investors.

"The Kreke family fully backs the Douglas Group and is considering raising its stake jointly with financial investors," Kreke told Reuters in e-mailed comments on Thursday.

Douglas, which has a market value of about 1.2 billion euros ($1.5 billion), earlier said unspecified board members with major holdings were in talks with several financial investors for a substantial stake in the company.

Thursday's news of the buyout plan came a day after the company predicted falling profit this year.

Two people familiar with the matter told Reuters that Kreke's family had approached buyout firms including Apax Partners APAX.UL and BC Partners BCPRT.UL to discuss possible plans to take Douglas private.

Apax and BC Partners declined to comment.

Douglas shares soared as much as 30 percent, hitting a five-month high, and stood 26.9 percent higher at 32.20 euros by 1304 GMT. Before Thursday's surge, the shares had lost almost 40 percent through the past 12 months.

TALKS AT EARLY STAGE

Douglas said the talks were at an early stage and cautioned that it was not yet clear whether there would be any deal or what form it might take.

"So far, the financial investors have neither submitted binding offers, nor have agreements on structure or financing of a potential transaction been reached," it said.

It added, however, that talks could result in suitors making an offer to all shareholders to acquire to group outright.

Joern Kreke, the 71-year-old chairman of Douglas, turned his family's chain of confectioners into a diversified retail company that now has almost 2,000 outlets across Europe.

The company now has five main business lines: perfume and cosmetics store chain Douglas, bookstore chain Thalia, jewelry seller Christ, clothing shops AppelrathCuepper and confectionery shop chain Hussel.

Douglas on Wednesday forecast falling profit this year as it battles to revamp its books division to compete with rivals like Amazon.Com Inc (AMZN.O).

Henning Kreke and his father Joern Kreke own a combined 12.6 percent of the company. Analysts say the wider family, which includes the Ekloeh branch, hold about 30 percent in total.

Other big shareholders are family-owned food and shipping conglomerate Oetker with 26 percent, and drugstore owner Erwin Mueller with 10 percent. A spokesman for the Oetker family declined to comment, and Mueller was not available for comment.

($1 = 0.7882 euro)

(Additional reporting by Alexander Huebner, Philipp Halstrick, Simon Meads; Writing by Maria Sheahan and Ludwig Burger; Editing by David Cowell)

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