BERLIN — The drama over Douglas Group AG continues.
The Hagen, Germany-based owner of confectionery, jewelry, fashion, and book retailers as well as Douglas Perfumeries, has been the subject of buzz and rumors suggesting privatization and divesting of less profitable businesses. Group president and chief executive officer Henning Kreke, whose family owns 12.6 percent of Douglas Group, initiated talks last month with financial investors, reportedly Apex Partners and BC Partners, and possibly Permira.
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But shareholder Erwin Müller, owner of Germany’s fourth-largest drugstore chain, could cap that development by achieving a blocking minority stake. Müller currently holds 10.8 percent of Douglas. It has since been learned that he has acquired options on about 15 percent of additional shares. The acquisition would put his stake close to or over that of Douglas’s largest shareholder, food and shipping firm Oetker, which holds 25.8 percent, and is said to be in close alliance with Kreke. Müller’s plan was made public thanks to new German regulations that took effect Feb. 1, which ensure that all option purchases trigger disclosure requirements, intended as a way to control stealth takeovers.
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Douglas acknowledged Müller’s shareholdings and movement towards acquiring more in a brief statement, concluding, “From its viewpoint, however, Douglas Holding AG is not in a position to assess whether, and if so, when, this may take place.”
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Müller, many of whose 640 drugstores boast large sections of selective perfumery and cosmetics items, has held Douglas stock since 2009. Reportedly, he has previously suggested coordinating buying and logistics with Douglas, a suggestion the Douglas Group rejected.
This latest news pushed up Douglas stock up nearly 5 percent on Monday, closing at 33.78 euros, or $43.74, and dropping slightly Tuesday to close at 33.47 euros, or $43.34. Douglas stock had tumbled 9.8 percent to a 10-year low of 25.39 euros, or $32.39, on Jan. 11 in response to the company’s statement that its book arm, Thalia, would need to shift online to recoup falling sales resulting from the growing popularity of e-books and Internet retailers in Germany. Reports of possible privatization had lifted the stock back up slowly in the weeks leading to Monday’s spike.
Douglas Group will release final financial figures Wednesday for its first quarter, which ended Dec. 31. Preliminary reports for the quarter showed Douglas Group sales up 1.4 percent to 1.2 billion euros, or $1.62 billion at average exchange; which is up 2.2 percent like-for-like. During that period, sales from Douglas Group’s online shops rose more than 20 percent.