A finance consortium that owns most of the property of insolvent German retailer Karstadt will submit a bid for all 120 department stores after reaching a deal with unions over wage concessions, Bild am Sonntag reported.
Highstreet, a vehicle led by Goldman Sachs, agreed in exchange to give the 25,000 strong workforce a stake of roughly 15 percent in Karstadt, making it now the frontrunner in the bidding war, according to the German Sunday weekly.
The creditor committee gave interested parties until Friday to tender an offer for Karstadt, one of the best known stores in Germany and a common downtown sight in any large city.
Following the recent offer from billionaire Nicolas Berggruen, Highstreet would be the third bidder for Karstadt.
Previously, only German-Swedish buyout group Triton had submitted an offer by the original April 23 deadline.
Deutsche Bank, Pirelli Real Estate and insurance group Generali also own stakes in Highstreet, which was widely blamed to charge leasing rates so punitive that they helped drive Karstadt’s parent Arcandor to ruin.
Ex-Chief Executive Thomas Middelhoff is now under investigation over a possible breach of trust in connection with the sale-and-leaseback deals.
Arcandor’s collapse in June 2009 wiped out the fortune of heiress Madeleine Schickedanz, and cost German private bank Sal. Oppenheim its independence after 220 years.
(Reporting by Christiaan Hetzner; Editing by Louise Heavens)