Karstadt Property Negotiations "Constructive" - Source
24 June 2010 - 6:42PM
Dow Jones News
Billionaire investor Nicolas Berggruen and property owner
Highstreet are yet to reach a final agreement on issues surrounding
Karstadt properties but recent discussions have been "very
constructive and productive," a person familiar with the matter
said Thursday.
Another person familiar with the matter told Dow Jones Newswires
the situation looks more positive than before.
The discussions began Wednesday and ran late into the night,
focusing on restraining rent increases for Karstadt in coming
years, with Highstreet potentially taking an equity stake in
return. Negotiations are expected to continue until late
Thursday.
Highstreet, led by U.S. bank Goldman Sachs Group Inc. (GS), owns
the bulk of Karstadt properties following a sale and leaseback
agreement arranged under Karstadt's previous owners.
The parties have until July 16 to negotiate a deal, otherwise
Karstadt risks being shuttered by insolvency proceedings.
Karstadt is a former unit of holding company Arcandor AG
(ARO.XE), which filed for insolvency last year after failing to
line up a government rescue.
Berggruen won a months-long bidding process to acquire Karstadt
earlier this month, beating out Highstreet and another buyout fund,
Triton.
-By Natali Schwab and William Launder, Dow Jones Newswires; +49
(0)69 - 29725 500; natali.schwab@dowjones.com,
william.launder@dowjones.com
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