FRANKFURT (Reuters) - Austrian real estate investor Rene Benko is likely to take over loss-making German department store chain Karstadt by the end of the month, two sources familiar with the deal said on Wednesday.
Benko has an option giving him the right to acquire Karstadt from U.S. investor Nicolas Berggruen from the end of August, the sources said, adding that he plans to exercise the option.
Karstadt would be transferred to Benko as soon as regulators approve the deal, the sources said.
Austrian magazine Format earlier on Wednesday quoted Benko as saying that he had been called on “to help by replacing Berggruen as the owner” of Karstadt.
Billionaire Berggruen rescued Karstadt from insolvency in 2010 but has come under fire from German unions and media for not investing enough in the chain, allowing rival department store group Kaufhof, owned by Metro, to take market share.
Last month Karstadt Chief Executive Eva-Lotte Sjostedt stepped down after only five months in the job, sparking fresh speculation that Berggruen could sell Karstadt to Benko for a symbolic price.
Berggruen’s holding company, which owns 84 Karstadt department stores, and Benko declined to comment.
Last year Berggruen sold a 75 percent stake to Benko in both Karstadt’s separate premium department store business and its sports outlets.
Benko this week failed in his final appeal to the Vienna high court to overturn a 2012 criminal conviction and one-year suspended jail sentence for illegally intervening in an Italian tax affair. The court ruling said that Benko had tried to influence Italian tax authorities in a case against his Signa Holding.
($1 = 0.7483 euro)
Reporting by Arno Schuetze, Matthias Inverardi, Maria Sheahan, Michael Shields and Angelika; Editing by David Goodman