Reuters: Bankruptcy News: UPDATE 2-Praktiker in talks to sell insolvent German DIY unit to rival

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UPDATE 2-Praktiker in talks to sell insolvent German DIY unit to rival Oct 17th 2013, 16:52 Share this Email Print Reprints Thu Oct 17, 2013 11:33am EDT * Hellweg in exclusive talks for Max Bahr stores - sources * Talks to be concluded by end of October - sources * Liquidation of other Praktiker assets continues * Cost of insolvency to eat up proceeds from break-up (Adds sources on Max Bahr sale) By Arno Schuetze and Alexander Hübner FRANKFURT, Oct 17 (Reuters) - The German home improvement chain Max Bahr, the insolvent upmarket brand of the bankrupt Praktiker group, is set to be bought by its rival Hellweg as the liquidation of the group's remaining assets continues, two sources said on Thursday. Praktiker, a household name in Europe's biggest economy, is being sold off piecemeal after the administrator failed to find a buyer for the whole group. Hellweg has teamed up with former Max Bahr chief Dirk Moehrle and is in advanced talks to buy 73 Max Bahr stores for more than 100 million euros, said the sources familiar with the transaction. However, it has no interest in 50 sites that were recently reflagged from Praktiker to Max Bahr. Talks are to be concluded by the end of October, the sources added. Hellweg had initially struggled to line up financing for the deal, but is close to clinching a deal to borrow over 60-65 million euros from Commerzbank and other lenders, a financial source said. Neither Hellweg nor Max Bahr's insolvency administrator were immediately available for comment. Despite the prospective sale, holders of bonds issued by the Praktiker group are unlikely to recoup any of their investment, a bondholder representative said. Ingo Scholz, a lawyer who represents holders of a 250 million euro bond, said the break-up of the business was likely to cover the costs of insolvency proceedings but little else. Praktiker, whose blue-and-yellow-branded stores selling paints, tools and gardening products are a familiar sight in Germany's out-of-town shopping centres, declined to comment. Praktiker, which employed around 20,000 full- and part-time staff, filed for insolvency in July after talks with creditors failed. The creditors had hoped that a sale of Max Bahr could help them recover some of their losses, but those hopes died when Max Bahr also filed for insolvency. The Praktiker stores have started a clearance sale so their empty shells can be sold off individually. Several of Praktiker's peers have expressed interest in buying individual outlets, the sources said. ($1 = 0.7412 euros) (Additional reporting Sabine Wollrab and Jan Schwartz; Editing by Kevin Liffey) Link this Share this Digg this Email Reprints

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