:. Food Industry News

Categories: Mergers and Acquisitions

Sal. Oppenheim Cuts Stake in Insolvent Arcandor

Source: Reuters
17/06/2009

Frankfurt, June 17 - Sal. Oppenheim, one of the main shareholders in Arcandor, has begun cutting back its stake in the bankrupt German retailer, it said on Wednesday, a week after Arcandor filed for insolvency.

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Private bank Sal. Oppenheim has sold its direct 3.7 percent stake in Arcandor, said one of the bank's personally liable partners, Dieter Pfundt.

He declined to comment on what Sal. Oppenheim's industry holdings company, an investment vehicle set up by Sal. Oppenheim to manage some of its investments, had in mind for the remaining 24.9 percent in Arcandor.

A source close to the bank told Reuters earlier that Sal. Oppenheim would decide in about three months' time whether to keep its stake and inject more money, or to exit the position, depending on the outcome of an assessment by the insolvency administrator.

German newspapers on Wednesday also said the bank was considering a sale.

The bank declined to comment on the reports.

The source said there had already been interest in the bank's stake but it would not engage in negotiations for now.

Arcandor's other major shareholder, the Schickedanz family, told a German newspaper on Sunday it would hold on to its 27 percent stake.

Arcandor filed for insolvency on June 9 after the German government rejected its requests for state aid, saying its owners had not pitched in enough money to mount a joint rescue for the group.

The collapse of Arcandor makes it Germany's biggest non-bank casualty of the financial crisis and the country's biggest post-war insolvency.

On Wednesday, Arcandor filed for insolvency for 15 more units, raising the number of staff put at risk in Germany to about 50,000, it said.

Arcandor's near 53 percent stake in Europe's second-biggest travel company, Thomas Cook, the specialty mail order companies of the Primondo subsidiary, and the home shopping channel HSE24 remain unaffected, it added.

JUMP SHIP

Arcandor shares, which have fallen about 77 percent since the beginning of the year, were down 5.6 percent at 0.67 euros by 1318 GMT.

"If Sal. Oppenheim leaves the burning ship it is hard to prevent the sinking," said Close Brothers Seydler in a note.

Sources with knowledge of the matter said on Tuesday that Arcandor's mail order business Quelle needed financing of about 50 million euros ($69.44 million) to keep operating. Guarantees or an insolvency loan were being considered.

Arcandor late on Tuesday cancelled the release of its half-year results, which had been scheduled for Thursday, citing the insolvency filing.

It had postponed the release twice already.

The company's administrator, Klaus Hubert Goerg, is due to give an update on insolvency proceedings on Thursday.



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