The year-long battle to take over insolvent German department store group Karstadt has taken another twist with the surprise return of Italian retail mogul Maurizio Borletti to the fray.

This story first appeared in the August 4, 2010 issue of WWD. Subscribe Today.

Although the Karstadt creditors committee in June accepted an offer from private investor Nicolas Berggruen and BCBG Max Azria Group, delays in signing the contract have prompted Borletti Group to come up with a counterbid worth 100 million euros, or $131.7 million at current exchange rates, in case the takeover fails.

“The offer we have presented is better in every way than what the administrator has on his desk today,” Borletti told WWD.

He said insolvency administrator Klaus Hubert Görg had replied that he was bound to Berggruen’s offer and could not consider Borletti Group’s bid for the 129-year-old Karstadt. Görg’s spokesman, Thomas Schultz, was not immediately available to comment Tuesday.

However, Borletti said he was hopeful Görg would change his mind.

“We still believe that he should engage with us and that we present a better solution for everybody, and we are confident that his decision might change in the next few days and that he will give us a chance of discussing this with him,” he said.

Though financial details of Berggruen’s joint venture with BCBG Max Azria Group were not disclosed, Borletti valued their bid at 65 million euros, or $85.3 million.

The Italian entrepreneur holds a 2 percent stake in the Highstreet consortium, which owns 86 of the Karstadt store properties and presented a competing bid for the German retailer that was rejected in June, along with that of German-Scandinavian private equity firm Triton.

Borletti Group, part of a consortium that owns French department store chain Printemps and Italian retailer La Rinascente, has pledged not to demand further cuts in — or concessions from — Karstadt’s 25,000-strong workforce, to maintain its 120 stores and to reinvest proceeds from dividends and divestments back into the company for the next five years.

Its bid is backed by Gordon Brothers Group, a Boston-based firm specialized in liquidating assets including inventory, Borletti said.

“It is an industry which I know very well and I believe there is an interesting potential in the redevelopment of Karstadt,” he said, noting the chain was underperforming Germany’s national average retail productivity per square meter by some 30 percent, despite being present in the best locations.

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