* Advent, Kreke family offer 38 euros per share
* Offer made via holding 80 pct owned by Advent
* Commitments to tender made for 50.5 pct of shares
* Minimum acceptance threshold set at 75 pct
* Douglas shares up 8.1 pct at 37.6 euros
(Adds Advent deal for Denmark's KMD, background on German
By Edward Taylor and Maria Sheahan
FRANKFURT, Oct 15 The founding family of Douglas
Holding AG has teamed up with private equity to bid
for the loss-making retailer, offering a possible end to months
of uncertainty over its ownership as it battles fierce
competition from online players.
Under a deal announced on Monday valuing the German
perfume-to-books retailer at 1.5 billion euros ($2 billion), the
Kreke family gains more control over the group as it carries out
a restructuring of its under-pressure books business Thalia.
The Kreke family, which said back in January it aimed to
take Douglas private with the help of financial investors, said
a deal had been agreed with Advent and was already backed by
Douglas said it will make a statement on the bid once the
full takeover offer has been published.
For Advent, the deal continues its recent track record of
dealmaking which has made it one of the most active buyout
groups in Europe since the credit crisis, with deals from
financial services to retail.
The firm, which is among those circling Dutch asset manager
Robeco, also sealed a deal to buy Danish software and services
group KMD for an undisclosed sum from rival EQT and pension fund
ATP, after the sellers initially baulked at offers well below
their 700 million euro asking price.
The 38 euros per share offer for Douglas represents a 9.2
percent premium to Friday's closing price and, according to
Advent and the Kreke family, is almost 42 percent above the
four-week volume-weighed average share price of Douglas prior to
the emergence of takeover rumours in January.
Douglas shares were trading 8.1 percent higher at 37.615
euros by 1439 GMT.
The takeover offer is being made by an investment vehicle of
which Advent owns 80 percent and the Kreke family 20 percent,
and would be the second-largest private equity-backed deal in
Germany this year, after bandages maker BSN Medical was bought
by Sweden's EQT.
"We want to jointly continue the success story of Douglas in
the way that it has been so far," said Douglas Chief Executive
Henning Kreke, speaking on behalf of the family, indicating
there were no plans for major disposals following the
The bidders said they had already secured commitments from
shareholders representing just over half of Douglas shares, but
the offer is conditional on reaching a threshold of 75 percent.
Joern Kreke, Douglas's 71-year-old chairman, turned his
family's chain of confectioners into a diversified retail
company that now has almost 2,000 outlets across Europe.
Hagen, Germany-based Douglas has five main business lines:
perfume and cosmetics store chain Douglas, bookstore chain
Thalia, jewellery seller Christ, clothing shops AppelrathCuepper
and confectionery shop chain Hussel.
But Thalia has seen growing competition from online
retailers such as Amazon.Com Inc, and measures to
restructure the chain helped cause a group net loss of 73
million euros ($94.7 million) in the first nine months of the
Kreke said his family and Advent fully supported the
restructuring strategy of Thalia's management and said he aimed
to continue driving the expansion of Douglas's profitable
perfume and jewellery businesses.
While Advent said the goal was not to delist Douglas
entirely, Kreke has said he hoped less exposure to the demands
of equity investors would make it easier for management to focus
on turning round the business.
Kreke also said the joint bid would help to ease "disquiet"
among Douglas shareholders.
Drugstore owner Erwin Mueller created tension among
shareholders last year by raising his stake above 10 percent
without commenting on his intentions.
Mueller has now agreed to tender his stake of almost 11
percent, as has family-owned food and shipping conglomerate
Oetker, which owns about 26 percent of Douglas.
The remaining shares making up the 50.5 percent committed so
far are held by the Kreke family - which would see its holding
rise to 20 percent from 12.7 percent now in a full takeover -
and by funds advised by Advent. The only other major shareholder
of Douglas is Bank Sarasin with 11.4 percent.
Advent and the Kreke family aim to complete the takeover by
the end of the year.
($1 = 0.7712 euros)
(Additional reporting by Simon Meads in London; Editing by Mike
Nesbit and David Holmes)