Arcandor chairman slams Metro merger plans -paper

FRANKFURT, May 24 (Reuters) - Arcandor's chairman called a plan by rival retailer Metro (MEOG.DE: Quote, Profile, Research) to combine the two companies' department store chains an immoral proposal but he did not fundamentally oppose a merger, a German weekly reported.

Der Spiegel quoted Friedrich-Carl Janssen in a preview of a report to be published on Monday as saying that the main premise of metro's current proposal was an insolvency of Arcandor (AROG.DE: Quote, Profile, Research) and would cost the public more than state aid.

Arcandor is under pressure to renew credit lines worth up to 710 million euros ($994 million) by June 12 to ensure its survival and has asked for state aid.

But Metro's proposal to create "German Department Store Inc" could make it harder for Arcandor to secure state support, by offering a cheaper alternative for ministers, some of whom oppose giving aid set aside for victims of the credit crunch to a company with long-term problems. [ID:nLL76890]

Arcandor chief executive Karl-Gerhard Eick reiterated his view that the company was doomed without state aid in Saturday's edition of German tabloid Bild. Ecik said he did not fundamentally oppose a merger of Arcandor's Karstadt and Metro's Kaufhof but that state aid was a prerequisite.

Metro is against government aid, arguing it would curb competition.

Janssen, who represents major shareholder Sal. Oppenheim on Arcandor's supervisory board, was quoted by Spiegel as saying he was not against a merger of the department store chains in general but it could "not be done under pressure, only in honest talks on equal footing". (Reporting by Nicola Leske; Editing by Dan Lalor) ($1 = 0.7145 euro)