Berggruen, Highstreet Agree On Karstadt Rents -German Minister

Billionaire investor Nicolas Berggruen and real estate fund Highstreet have reached a basic agreement on rents for German retailer Karstadt, which Berggruen has signed a deal to acquire, German Labor Minister Ursula von der Leyen said Friday.

However, specific terms of the deal must still be clarified and internal issues within Highstreet, led by Goldman Sachs Group Inc. (GS), remain a challenge, von der Leyen said at a press conference.

"The negotiations are at a point where the most difficult issues, the rental conditions, have been agreed to. That's a big and important step forward. Now only technical problems remain, internally at Highstreet."

Von der Leyen met with labor representatives from Karstadt earlier Friday to discuss the progress of talks, following another round of late-night discussions in London between Highstreet and representatives from Berggruen's buyout fund earlier this week.

Spokesmen for Berggruen and Highstreet have said the talks are proceeding constructively.

Recent negotiations have focused in part on Highstreet's desire to increase rental prices relatively quickly in subsequent years, which Berggruen wants tied to Karstadt's revenue performance.

-By Patrick McGroarty and William Launder, Dow Jones Newswires; [phone]; [e-mail]