None of the firms' spokesmen confirmed the report after theHandelsblatt newspaper quoted sources in the Kaufhof executiveadvisory committee--which also includes union representatives.However, a Metro spokesman said the sales process is at an earlystage and due diligence has not yet started.

Blackstone had been interested in Kaufhof when it was put up forsale originally in 2004, but subsequently cancelled bythen-Chairman Hans-Joachim Körber. Insiders estimate the sale willpartly depend on the success of the sale of insolvent competitorKarstadt, particularly if the latter is sold as a single package.This would signal greater competition in the segment – with theprice put on Kaufhof regarded as high. Conversely, a break-up ofKarstadt would provide a Kaufhof buyer with the option of adding tolocation gaps in its German presence. Kaufhof's EBIT yield of 3.4%is seen reasonable, and improvable.