Jan 16, 2012
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Douglas CEO says no plans yet for company break-up

Jan 16, 2012

FRANKFURT - The CEO of Douglas Holding AG denied on Friday a report his family was already planning to break up the perfumes to books retailer should they succeed in taking it private.

"We are still in the evaluation phase," Henning Kreke told Reuters in an email. "Therefore there can be no plans to break up the Douglas Group."

German daily Financial Times Deutschland earlier cited financial sources as saying that Douglas wanted to focus on its perfume business and sell other divisions such as the Christ jewellery stores or the Thalia bookstore chain, which faces restructuring to cope with online competition.

Douglas, which has a market value of about 1.2 billion euros ($1.5 billion), said on Thursday that board members with major holdings were in talks with several financial investors for a substantial stake in the company.

Kreke stressed on Friday that the talks were at an early stage and no binding offers had been received.

"It is impossible to say at this stage what form a deal would take or even if it will come to a transaction," he said.

Shares in Douglas, which soared 30 percent on Thursday on news of the possible buyout, were down 1.7 percent at 31.47 euros on Friday at 1126 GMT.

Berenberg analyst Anna Patrice said she was cautious on whether a deal could be pulled off, given a possible conflict of interest as both the Douglas chief executive (CEO) and chairman are members of the Kreke family.

She added that there might be only limited upside for potential financial investors as any restructuring or sale of the books division could prove difficult.

Kreke told analysts at a meeting on Thursday that Douglas had been approached by investors several times in recent years and that the Kreke family, which has a 12.6 percent stake in Douglas, decided to initiate talks over a buyout because it sees the company's shares as undervalued.

"The Kreke family is convinced the company could be more successfully managed over a longer period of time if it was not subject to the short-term pressure of quarterly reporting," Kreke later told Reuters.

($1 = 0.7814 euros)

(Reporting by Maria Sheahan, Matthias Inverardi and Victoria Bryan; Editing by Will Waterman)

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