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Douglas Stock Jumps on Takeover Rumors

The company's shares gained more than 9 percent in midday trading.

BERLIN — Douglas Holding AG stock is on the rise today on rumors of a takeover deal with U.S. private equity firm Advent.

 

Shares for the parent company of Douglas Group, whose activities include Douglas Perfumeries and retailers of confectionery, fashion, jewelry and books, opened this morning up 12.9 percent. By midday, the stock had risen more than 9 percent.

 

The uptick came in response to a report in today’s Financial Times Deutschland, released late Monday night. According to the newspaper, Advent has reached a deal with two of Douglas’ largest shareholders and could present a takeover bid as soon as next week. Advent’s bid would reportedly amount to between 1.5 billion euros and 1.6 billion euros, or $1.88 billion to $2 billion at current exchange, at a price of 38 euros to 40 euros per share, or $47.55 to $50.06. 

 

A Douglas Holding spokeswoman declined to comment on the possible deal with Advent or its stock performance.

 

Hagen, Germany-based Douglas has been the subject of takeover speculation since mid-January, when the company confirmed that privatization talks were being held. Potential investors were later identified as Apax Partners, BC Partners and Permira.

 

Analysts have cited costs and risks from the group’s Thalia book arm as an unattractive factor for outside investors. At Douglas’ annual general meeting in March, Henning Kreke, president and chief executive officer of Douglas Holding, said the company would only join forces with an investor to go private if common interests could be established and that there were no plans to sell off any of the less successful retail arms, such as Thalia. 

 

Douglas Group posted a third-quarter net loss of 9.8 million euros, or $12.6 million at average exchange, which the company said was a result of restructuring costs for Thalia. Still, the company confirmed its annual forecast of a slight growth in sales to 3.4 billion euros, or $4.25 billion at current exchange, but said due to high expenses it does not expect to distribute a dividend.