(Adds sources saying deal to be announced Monday)
FRANKFURT, Oct 14 (Reuters) - Private equity investor Advent plans to make a formal takeover offer for Douglas on Monday after reaching a deal with the biggest shareholders of the German retailer, two people close to the transaction said on Sunday.
Advent is joining forces with one of Douglas’s current shareholders in a concerted effort to take the books-to-perfumes retailer private. Talks between financial investors and Douglas’ largest shareholders have been taking place since the beginning of the year.
Advent and 13-percent stakeholder Kreke have struck a deal to buy 37 percent of Douglas from other co-owners Mueller and Oetker, the sources said. That will take their holding above the 30 percent level that triggers a bid for the whole company under takeover rules.
About two-fifths of Douglas’s shares are owned by stock market investors, with a bank owing the rest.
One source close to the transaction said that Advent and Kreke will set up a joint bidding company, in which Advent will hold 80 percent and Kreke 20 percent. Kreke will hand over his current stake to this firm.
Advent and Kreke declined to comment, while Douglas, drugstore-chain owner Mueller and Oetker - who is famous for its frozen pizzas - were not immediately available for comment.
Douglas recently confirmed that it is in talks with a financial investor but cautioned that it was uncertain whether a transaction would actually go ahead.
Douglas CEO Henning Kreke said at the start of this year that he would like to take Douglas private with the help of a private equity investor.
Sources had earlier told Reuters that Advent was nearing a deal to get a majority stake in the retailer, which runs perfume, clothing, books and confectionary stores.
According to a report of German magazine Der Spiegel, which had previously reported the agreement, Douglas’ supervisory board will discuss Advent and Kreke’s plan to take over the company on Monday. (Reporting by Alexander Huebner, Arno Schuetze and Philipp Halstrick; Editing by Erica Billingham & Theodore d‘Afflisio)