Qatar Holding to buy Printemps for 2 billion euros

Tuesday, 02 April 2013
Qatar Holding to buy Printemps for 2 billion eurosA group of Qatari investors is posed to be the most likely new owner of French department store Printemps, after they presented them with an offer reportedly being up to 2 billion euros. Direct competitor Galeries Lafayette has also approached Printemps owners.

PrintempsQatar Holding to buy Printemps for 2 billion euros is currently 70 percent owned by Deutsche Bank real estate investment unit RREEF and 30 percent by the Borletti Group, which is headed by Italian businessman Maurizio Borletti.

According to Reuters, Borletti and RREEF had been talking to Qatari investors about selling Printemps to investors for circa 2 billion euro. The deal would be executed by Qatar Holding through its Luxembourg-registered Divine Investments (Disa), the operating arm of the nation's sovereign fund Qatar Investment Authority.

Last news is that rival French luxury retail group Galeries Lafayette is pushing Qatari investors to drop their support of Borletti and instead consider their proposal, ‘Le Figaro’ reported Tuesday. Under those terms, Qatar would buy Printemp’s real estate assets for 1.01 billion euros while Galeries Lafayette would pay something in the region of 780 million euro to buy its operations.

In the Printemps deal, Borletti had been keen to retain his holding and brought in Qatar as a friendly co-investor when RREEF put its stake up for sale. RREEF entered exclusive talks, but late last week it became clear that the Qataris' appetite for Printemps proved stronger than Borletti's desire to remain a shareholder, reported ‘Property Investor Europe’.

Galeries Lafayette’s CEO Philippe Houzé has called for a national French solution while a Borletti spokeswoman told Reuters that "RREEF retained the offer and no rival offer can be submitted given the exclusive nature of the talks." In the same vein, Houzé told the ‘Financial Times’ that "We are still ready to negotiate – I am not throwing in the sponge yet."

Management and jobs safe

Divine’s offer for Printemps includes a seven-year management contract with Borletti Management Group (BMG). It centres on “the provision of advice of a strategic and operational nature regarding the implementation of the business plan,” the official documents said.

Terms of the contract were not disclosed, but according to sources close to the matter, BMG’s management fee would be equal to 1 percent of Printemps’s revenues.

Details of the Qatari proposal were presented to Printemps' works council last week, as part of a plan to complete the deal by end-July, ‘Le Figaro’ revealed. “We are not worried about the Qatari investors because the Qataris own Harrods and continue to deliver service principally through their employees to customers," said Georges Das Neves, secretary-general of the Unsa Printemps trade union.

The present Printemps management team is also set to remain in place, including CEO Paolo de Cesare. Borletti will remain initially as an advisor.

The purchase of Printemps would expand Qatar Holding portfolio of high-end investments, including its purchase of Harrods, acquisition of Valentino and stakes in LVHM and Porsche.

Borletti and RREEF bought Printemps in 2006 from French luxury group PPR for 1.1 billion euros.

Printemps now has 16 stores and employs about 4,000. Its 2011-12 turnover rose 13 percent to 1.45 billion euros.