Will you have the means to repay the debtD

PPR announced yesterday at the end of a Board of Directors granted exclusivity of negotiations for the sale of its subsidiary France spring to a consortium led by RREEF, in association with the Borletti group, thus confirming the information of the "voices" of June 20. The offer values activity stores, which comprises 17 institutions and close employees 5.300 1.075 billion for a turnover of 752 million in 2005. The CFE - CGC Union denounced the attitude of the management who gave "no information" about a possible surrender of the Department stores Le Printemps. "On the social dialogue that the group likes to put forward, and the Committee of European business in particular, they are for him little more than decorative objects", deplored the organization in a release.

Advised by the Rothschild Bank, the group distribution and luxury entered the last straight line of a surrender announced several months by rumors. The consortium led by Maurizio Borletti was in competition with the Dutch real estate fund Rodamco associated with Group of department stores Galeries Lafayette. The French land Unibail, a moment on the ranks, finally threw the sponge. The purchasers, Maurizio Borletti, representative of Borletti group and Chairman of the Board of Directors (non-executive) of Italian stores La Rinascente and RREEF, a specialized in real estate, investment funds are advised by Deutsche Bank. In an interview with the "echoes", the grandson of the founder of store La Rinascente (his family had sold them to the Agnelli late 1960s), and Daniel Rigny, one of the leaders of Europe at RREEF investment, specify their project.

You enter into exclusive negotiations with PPR for the redemption of the spring. What is that makes the balance for your project

Maurizio Borletti. He is a firm offer, which values the company to 1.075 billion euros and which has been regarded as the best human, operational and financial plans. Our project is to develop the Group spring, in particular its flagship of the boulevard Haussmann store, but in the provinces also, has like the new site already planned in Toulouse and we expect much. RREEF and Borletti Group invested year last Rinascente. This successful experience has probably also promoted the positive response of PPR.

You warrant to keep all jobs

MR. B. Need to register our approach in line with that which we have initiated with Rinascente, purchased in May 2005 by a consortium comprising these same two partners. This operation not only no job losses but still we are preparing a major opening in Rome that will generate several hundred. Our project for Rinascente is to invest 130 million euros over seven years, of which 14 million are already committed to one "flagship" of the Piazza del Duomo in Milan. It is a major project that has allowed us to obtain a number of luxury brands and evolve our mix product to the high-end. For spring, we anticipate 280 million euros of investment over five years. The boulevard Haussmann store has important potential and we plan to invest substantially.

How is your offer structured

Daniel Rigny. RREEF is a division of Deutsche Bank which manages real estate funds and which is also developing a capital-investment activity. We manage EUR 53 billion worldwide. We act in this operation through a new Fund, RREEF Global Opportunities Fund II, which the project is to resume all of the shares of PPR through a common vehicle with the Borletti group in society France spring. It will be a subsidiary of French law of 70 at least of RREEF Global Opportunities Fund II, the rest being held by the Borletti group.

The acquisition will be financed by own funds and bank debt by the Natexis Banque Populaire group. We have been advised, for this operation, by teams of mergers and acquisitions of Deutsche Bank.

Will you have the means to repay the debt

D. R.. Spring releases slightly more than 60 million euros of operating income, which is largely sufficient to cover bank loans. The company also has real value assets that have a very high potential. The best way to enhance real estate heritage underlying it is to have a successful commercial activity. Although spring and Rinascente operate on separate marches, there are complementarities and potential synergies including on future projects such as customer relationship management. It is clear that the profession of the stores will not reach heights of profitability as the luxury. But he has other features and other levels of risk.

MR. B. Stores have been major transformations, and those who were able to adapt earn money. I think of Selfridges in England, leaving 8 to 9 margin Ebit, or Neiman Marcus in the United States, or Isetan at the Japan. We must have the ability to invest between 3 and 4 of the turnover in stores to make real cathedrals of "shopping". The store is not an outdated formula is instead a formula for the future.

Will you work with the current management

MR. B. We have full confidence in the current management led a repositioning strategy along the lines of what we want. Soon as possible, we will work together to implement our development project.

What is the timing of the operation

MR. B. We enter into exclusive negotiations with PPR. This assignment draft is submitted for the opinion staff representative bodies concerned. On the other hand, must await the agreement of the authorities of the competition. But I have no reason to doubt. However, it is unlikely that everything basically shut before the launch of balances of summer.