France's Galeries Lafayette to counter Qatar bid for Printemps

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French luxury retail group Galeries Lafayette plans to make a counter offer for rival department store group Le Printemps, its CEO told French daily Le Figaro.

Galeries Lafayette CEO Philippe Houze told Le Figaro he hopes Qatari investors will link up with Galleries Lafayette and drop their support for Italian businessman Maurizio Borletti.

Printemps is 70 percent owned by Deutsche Bank real estate investment unit RREEF and 30 percent by the Borletti Group, headed by Borletti.

A source close to the talks told Reuters on Wednesday that RREEF and the Borletti Group were in talks to sell Le Printemps to Qatari investors for up to €2bn (US$2.67bn).

"Borletti's project is simply to get Qatar to finance the acquisition since he does not have the funds himself," Houze was quoted by Le Figaro as saying.

The paper said Houze will propose a deal under which Qatar buys Printemps's real estate assets for €1bn while Galeries Lafayette buys its operations for €800m.

"We will contact the Qataris to propose that we buy Printemps together," Houze said, adding that he did not expect objections from antitrust authorities.

Borletti, who owns Italian department store La Rinascente, bought Printemps together with RREEF from French retail and luxury group PPR for €1.1bn in 2006.

Galeries Lafayette - whose flagship Paris store is right next to Le Printemps - had also made a bid then.

Borletti and RREEF have spent around €350m on renovations and making Printemps more upscale. Printemps now has 16 stores and employs 4,000. Its 2011/12 turnover rose 13 percent to €1.45bn.

RREEF had been looking to sell for months, while Borletti told Reuters in January he wanted to hold on to the business.

Qatar has bought a string of stakes in high-end retailing, fashion and luxury goods companies.

It bought London's Harrod's department store in 2010 for an estimated GBP£1.5bn in 2010. Last year, the Qatari royal family acquired Italian fashion brand Valentino for €700m.

Qatar's sovereign wealth fund also owns 8.7 percent of US jeweller Tiffany & Co, a stake of over 1 percent in French luxury group LVMH and a small stake in German sports car maker Porsche.

Qatar has close diplomatic and business ties with France.

It owns a number of buildings on Paris jewellery Mecca Place Vendome, minority stakes in companies such as waste and water management group Veolia Environnement, and controls leading French football club Paris St Germain.

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