Aug 18, 2009
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Arcandor's Thomas Cook stake set for placing

Aug 18, 2009

LONDON, Aug 18 (Reuters) - Insolvent German retailer Arcandor's (AROG.DE) 43.9 percent stake in Thomas Cook (TCG.L) is set to be off-loaded via a share placing in early September following strong interest in the stock from institutions. Sources familiar with the situation told Reuters that Arcandor's syndicate of creditor banks, led by Royal Bank of Scotland (RBS.L), Commerzbank [COMM.UL] and BayernLB, expect the placing to be oversubscribed.

One of the sources said the banks had seen "considerable interest" from investors hoping for a slice of Arcandor's 780 million pound holding in Europe's second biggest travel company.

The banks, who appointed UBS to advise them in relation to the stake, issued a statement in July saying they were examining a range of options, including a placing, a sale to a single buyer or combination of the two.

One of the sources said a placing was identified as the preferred option because initial interest in the entire stake from private equity or trade buyers, including German retailer Rewe, failed to develop into firm offers.

The stake in Thomas Cook, Europe's second-biggest travel company behind TUI Travel (TT.L), is held by banks and bondholders as collateral against a 1.5 billion euro ($2.12 billion) loan taken out by Arcandor.

A further 8 percent stake was used by Arcandor to back a convertible bond.

Arcandor, whose business includes Karstadt department stores in Germany, filed for insolvency in June after its request for state help failed.

Shares in Thomas Cook were trading at 208 pence, down 0.9 percent, at 0950 GMT, valuing the business at just under 1.8 billion pounds. Arcandor's stake is worth about 780 million pounds ($1.28 billion) at the current share price.

UBS, RBS, Commerzbank, Bayern LB and Thomas Cook declined to comment.

(By Matt Scuffham. Additional reporting by Steve Slater in London and Eva Kuehnen in Frankfurt, editing by Paul Hoskins)

($1=.7074 Euro)

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