Thursday, December 21, 2006

KarstadtQuelle May Raise EUR 800 Million for 49% Stake in Store Portfolio Fund

NAMNEWS - December 18, 2006

Retail group KarstadtQuelle has received offers for its stake in a property fund, and could use the proceeds to buy Lufthansa's stake in Thomas Cook, Reuters has quoted sources familiar with the situation as saying. The report said that several prospective buyers have shown interest in KarstadtQuelle's 49% stake in a property fund. A sale could generate E800m for KarstadtQuelle, which could help with restructuring and allow for acquisitions.

The sources said that offers are coming from Anglo-American financial investors keen to buy a large portfolio, given expectations of gains in the German retail property market and declines in the dollar. A sale would enable KarstadtQuelle to buy Lufthansa's half of their jointly owned travel tour operator Thomas Cook without taking on new debt.

In March, KarstadtQuelle sold its property portfolio (in a large sale leaseback transaction) for E4.5bn to a joint venture owned 49% by itself and 51% by Whitehall, a Goldman Sachs property fund. Karstadt had hoped to reduce its stake in the fund over a period of three to five years, generating E800m, but the improving German property market and better-than-expected performance at Karstadt's department stores are making an earlier exit possible. Sphere: Related Content

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