Magic circle trio joins Latham on €1.5bn private equity bid for German retailer

Allen & Overy (A&O), Clifford Chance and Linklaters are among the firms winning advisory roles on a joint €1.5bn (£1.2bn) bid for Germany’s Douglas Holding by private equity group Advent International and the high-street retailer’s founding family.

Wolfgang Grobecker
Wolfgang Grobecker

Latham & Watkins and German firm P+P Pöllath & Partners also advised on the buyout, which follows months of speculation about a potential deal to take the company private.

Advent and the Kreke family have put in a voluntary takeover offer for the outstanding shares in Douglas, in which CEO Henning Kreke and chairman Jörn Kreke, his father, currently hold an interest of around 13 per cent.

Douglas said Advent and the Krekes had already received commitments securing the purchase of 50.5 percent of shares in the company from existing shareholders. They launched the bid via a holding company, Beauty Holding Three, in which Advent has an 80 per cent stake and the Kreke family 20 per cent.

It represents an offer of €38 per share for the Hagen-headquarted company, which sells products including perfume, books and jewellery under store brands such as Douglas, Thalia and Christ.

The takeover will partly be funded by €830m (£663m) of senior debt underwritten by physical bookrunners Bayern LB, Credit Suisse, Goldman Sachs, IKB Deutsche Industriebank, JPMorgan, LBBW, Raiffeisen Bank International and Unicredit and non-physical bookrunner Commerzbank.

Latham advised Advent for the first time in Germany, fielding Frankfurt corporate partners Hans-Jürgen Lütt and Wilhelm Reinhardt.

Düsseldorf-based corporate partner Hans-Ulrich Wilsing led the Linklaters team advising Douglas, which also turned to A&O banking partner Neil George Weiand in Frankfurt for advice on the financing.

Pöllath Munich-based corporate partner Wolfgang Grobecker led for the Kreke family, while a London and German team at Clifford Chance represented the underwriting banks on the loan. The magic circle firm fielded a team led by City banking partner Jim MacHale alongside London banking senior associate Min Jin Teo, while the German team comprised Munich banking partner Thomas Weitkamp, Frankfurt corporate partner Johannes Perlitt and Frankfurt corporate associate Anja Döring.

Background to this deal:

The deal represents a first-time appointment from Advent for Latham in Germany, although the firm has an established relationship with the private equity house in other jurisdictions such as the US and France.

According to German legal magazine Juve, Latham’s Lütt was originally instructed to advise established client BC Partners on a potential takeover for Douglas and continued to advise it when Advent teamed up with it to consider making a joint bid. When BC Partners subsequently pulled out, Lütt retained the mandate acting for Advent, according to Juve.

Grobecker joined Pöllath in 2010 after leaving US firm Milbank Tweed Hadley & McCloy, at which he spent ten days after his former firm, Slaughter and May best friend Hengeler Mueller, issued a statement alleging “unacceptable personal misconduct” while at the German independent (17 February 2010).