After months of negotiations, Douglas Holding, a leading German retailer known throughout Europe for its perfumeries, jewelry and book stores, is well on the road to going private. The Wall Street Journal reported on Monday that the company's founding Kreke family has joined private equity firm Advent International in a takeover offer.
"The objective of this transaction is to transfer Douglas into a stable ownership structure," said Chief Executive Henning Kreke, as reported by The WSJ. Together Henning and his father, the company's Chairman Jörn Kreke, jointly hold about 13 percent of the shares.
According to the paper, Douglas began exploring the idea of going private one year ago, "dissatisfied with its market valuation, complex shareholder structure and troubles revamping its Thalia bookstore chain."
The company is valued at $1.94 billion.
The Krekes already have binding commitments to accept the deal from shareholders representing over 50 percent of the shares in Douglas, through their joint company Beauty Holding Three AG, and need another 25 percent of its shares, for more than 75 percent, to meet the minimum threshold for the deal to be successful, the paper reported.
Advent holds 80 percent of the holding company and the Kreke family has 20 percent.
The company will focus on accelerating the growth of its perfume and jewelry divisions, according to an Advent press release, increasing the company's presence in the domestic and international markets. The partners will actively pursue the restructuring and strategic repositioning of Douglas' book business, to make it more viable for the future. The release also states that the current positioning of it business divisions, fashion and confectionery are to be continued in a profit-oriented way.
Advent International is one of the world's leading global buyout firms, with offices in 16 countries on four continents. It was established in 1984. Ralf Huep, general manager of Advent International in Frankfurt, notes in the firm's press release, "We are convinced that the DOUGLAS Group has great potential, and we are looking forward to promoting the strategic development together with the management and the employees."
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