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Private equity interest in Karstadt-Kaufhof waning

The number of private equity fund bidders eyeing Arcandor’s Karstadt department stores in a deal that could merge Karstadt with Metro’s Kaufhof has dropped to four from six.

Blackstone Group, widely noted as one of the original bidders, is not interested, according to the report by Dow Jones Newswires.

Permira is also unlikely to make a bid for a combined Karstadt and Kaufhof, two people familiar with the matter said.

A total of six private equity bidders from the US and the UK were invited to look at Karstadt’s books in February, and tours of some Karstadt branches have since followed.

In addition to Permira and Blackstone, the other bidders are reported to include Apollo Management, Sun Capital, Texas Pacific Group and Pamplona Capital Management, according to the report by William Launder of Dow Jones Newswires.
Karstadt is currently undergoing insolvency proceedings following the collapse of its parent Arcandor last year, and has until the end of April to line up a buyer or risks being split up.

Metro, the solvent owner of rival department store chain Kaufhof, recently said it would only consider selling the retailer at the right time and price. At the time of Arcandor’s insolvency, Metro itself was interested in buying the bulk of Karstadt’s stores, but its interest has since cooled.

Karstadt’s insolvency administrator, Klaus Hubert Goerg, wants to sell all of Karstadt’s more than 100 branches together, even though previous attempts to do so and to merge with Metro fell through.

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