Advent on course to acquire German-based Douglas Holding

Dusseldorf: Private equity firm Advent is nearing a deal to buy a majority stake in German retailer Douglas Holding AG, potentially scuppering plans by the group’s CEO to take control.

US firm Advent is in advanced talks with two big shareholders, Erwin Mueller and the Oetker family, although no deal is expected imminently as legal issues need to be cleared up. Shares in Douglas, which sells everything from books to perfume, rose as much as 12 per cent to their highest level since June 2011 after the news, first reported by German newspaper Financial Times Deutschland.

The paper said Advent will offer around 38 to 40 euros for each Douglas share, valuing the company at between 1.5 billion euros and 1.6 billion.

Silvia Quandt analyst Klaus Kraenzle said: “Given that Douglas’ book division (Thalia,Buch.de) remains a restructuring case but will be part of the group ... in the foreseeable future, a price of 40 euros is quite reasonable.”

Douglas CEO Henning Kreke said at the start of this year that his family, which owns 12.7 per cent of the shares, would like to take Douglas private with the help of a private equity investor.

However, the need for restructuring at the group’s Thalia chain of bookstores has put off potential partners, sources have previously said, and if Advent takes the majority, it could well push out the Kreke family unless they agree to work with the US investor. A source close to Advent said the investor was seeking a solution that was amicable for all parties.

Oetker, best known for its frozen pizzas and which is the largest shareholder in Douglas with a 25.8 per cent stake, declined to comment, as did Advent, Kreke and Douglas.