BERLIN — The Signa Group, an Austrian real estate company backed by Greek shipping magnate George Economou, and Nicolas Berggruen, owner of Karstadt, are both in talks with the Metro Group over the sale of its Kaufhof department store chain.
Metro’s search for a buyer for the 139-door Kaufhof started in 2008 when the group decided the retailer was no longer strategic to its core business. Years of ongoing speculation concerning a possible merger with German competitor Karstadt and the formation of a so-called “German Department Store AG” died down after Berggruen acquired the insolvent Karstadt in 2010.
A Metro spokesman confirmed both parties are in initial talks with the group but emphasized there are no concrete details as yet. Signa, which owns about 1 billion euros, or $1.37 billion, worth of real estate in Germany, including the buildings housing the Karstadt chain’s Öberpollinger and Karstadt Sport stores in Munich, has reportedly bid 2.4 billion euros, or $3.28 billion, for Kaufhof. Reports say Berggruen has made separate bids for the operative Kaufhof business and for the firm’s real estate, half of which is currently owned by the Metro Group. Recent rumors have also named Spanish chain El Corte Ingles as an interested buyer, but Metro declined comment.
Kaufhof generated sales of 3.6 billion euros, or $4.78 billion, in 2010 while the Metro Group, which also includes cash & carry, electronics, supermarket and real estate divisions, posted total sales of 67.3 billion euros, or $89.37 billion, calculated at an average exchange rate for the year. Third-quarter results will be released Thursday.