PARIS — A Borletti Group spokeswoman declined to comment Friday on Galeries Lafayette launching a counter bid to obtain the 70 percent stake in Printemps owned by Deutsche Bank’s real estate asset management division, RREEF, and currently up for grabs
“We have entered into exclusive negotiations, which means that our offer was the best and consequently accepted by RREEF,” the Borletti spokeswoman upheld, referring to a planned buyout with unidentified Qatari investors that was confirmed on Wednesday.
In an interesting turn late Thursday, Galeries Lafayette chief executive officer Philippe Houzé announced in French daily Le Figaro that he would enter into negotiations for Printemps.
Houzé, whose previous offer to acquire RREEF’s stake for 1.8 billion euros, or $2.38 billion at current exchange, was rejected late last year, told Le Figaro he would not “throw in the towel.” However, he assured that his counter bid was not directed against the Qataris, but was to be understood as a proposal to the Qataris “to join forces.”
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“I wish to combine Qatar’s professionalism in real estate with our know-how of managing large stores,” declared Houzé, making no secret of his disappointment over the apparent choice of RREEF and Borletti Group, which owns the other 30 percent of Printemps and is keen on holding on to its stake, “to privilege a financial operation over an industrial project.” That, according to Houzé, would be the better option for France “in need of investment in order to develop its attractiveness.”
According to Le Figaro, Houzé is planning big. He has “multiplied his visits to the Elysée [Palace]” to obtain the government’s support for a project that would turn the Boulevard Haussmann, home to both Printemps and Galeries Lafayette, into a “tourist zone,” allowing shops to stay open on Sundays and create 1,000 voluntary posts with double pay — a topic hotly debated in France these days.
Although Houzé would not divulge the details of a possible business model with the Qatari investors, Le Figaro reported it would include splitting Printemps into two companies — one taken over by the Qataris for 1 billion euros, or $1.32 billion, regrouping the real estate assets, and the second, a development company to be snapped up by Galeries Lafayette for 800 million euros, or $1.05 billion.
An acquisition of Printemps by Galeries Lafayette — which already operates 59 locations in France and three abroad, in Casablanca, Berlin and Dubai — would significantly bolster its muscle.
The two department store chains combined would create a worldwide retail powerhouse with annual sales of 6.5 billion euros, or $8.61 billion, making opposition from monopoly watchers a likely scenario.