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Arbitrage anyone?

Company is Arcandor AG (German). Not a really good business, but the investment certainly appears to be.

Arcandor (Germany) a holding company that owns primarily three businesses, but you only really have to concern yourself with one. Arcandor owns owns 52% of Thomas Cook Group PLC (UK), which has lots of subsidiaries around the world. Arcandor is 54% owned by two entities: 26.4% by Madeleine Schickedanz (Forbes 142) and 28.2% by Sal. Oppenheim-a Private European Bank based in Cologne and has a direct relationship with Ms. Schickedanz.

Thomas Cook Group PLC is listed on the LSE with a market Cap of $2.389 billion. Arcandor's 52% ownership is therefore worth $1.2 billion. Arcandor is selling for $650 million, down 90% YTD mostly on concerns about its retail division, Karstadt. Looks as though they have gotten past some of the S-T borrowing issues and that the price has some asset protection from further decline. There are also some Arcandor converts out there which are exchangeable into Thomas Cook Group PLC Shares.

Though not always meaningful:
P/B is 0.64
(If I recall correctly, P/E is 0.33 ish)

Might consider Arcandor individually, or by also selling Thomas Cook TCG against it.


Discussion of liquidity issues:

http://www.forbes.com/2008/09/24/arcandor-refinancing-germany-markets-equity-cx_vr_0924markets08.html

http://www.oppenheim.de/internet/presseportal/10_pressemitteilungen/2008/2008-09-29_arcandor/2008-09-29_pr_arcandor.pdf

Also, BayernLB, Dresdner Bank AG, Royal Bank of Scotland plc all agreed to extend financing.

website is:
http://www.arcandor.com/en/index.asp

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