Germany's Douglas Holding AG yesterday said that its board has decided to recommend a €1.5-billion ($2 billion) takeover offer from private equity firm Advent International and the Kreke family, founder of the loss-making perfume-to-books retailer.

''Following a thorough review, both boards recommend the shareholders of Douglas Holding AG to accept the voluntary public takeover offer published on 31 October 2012 by Beauty Holding Three AG, a subsidiary of the financial investor Advent International,'' the Hagen-based company said in a statement.

In October, Advent and The Kreke family, through their newly established investment vehicle Beauty Holding, offered to buy Douglas Holding for €38 per share, a premium of 9.2 per cent, valuing the company at €1.5 billion. (See: Kreke family, Advent International to buy German retailer Douglas Holding for $2 bn)

Douglas Holding CEO Henning Kreke and his family, who own 12.7-per cent stake in the company, had told shareholders in March that he would like to take Douglas Holding private in partnership with a private equity investor.

Both Advent and the Kreke family said that Beauty Holding has already received acceptance of 50.5 per cent of the share capital of Douglas Holding, but the offer is conditional on receiving 75 per cent acceptance.

The Oetker family, one of the richest families in Germany that owns Dr. Oetker and the largest shareholder in Douglas Holding with a 25.8-per cent stake, and Erwin Mueller with 10.7 per cent, had agreed to tender their shares to the offer.

The management board and the supervisory board of Douglas Holding concluded that the €38 per share offer is attractive and fair in financial terms, and this assessment is supported by the considerable premium offered in relation to the historical stock prices of the company in the past months and the three-month average price.

It added that their assessment is also supported by the opinions of Bank of America Merrill Lynch and HSBC both of whom concluded that the offer price is economically adequate.

Douglas Holding owns over 1,900 stores, more than 1,500 of which are in Germany and the US. It has more than 1,168 perfume stores in 18 European countries, according to its website. It also owns 295 ''Thalia'' book stores, 207 ''Christ'' jewellery stores 13 ''AppelrathCüpper'' fashion stores, and 245 ''Hussel'' confectionery shops.

Facing competition from online retailers such as Amazon, in March Douglas Holding had hired management consultants McKinsey to advise on restructuring Thalia chain of more than 200 book shops in Germany.

Traditional bookselling through book stores have taken a beating with the advent of digital publishing and the growth of the ebook market, and Thalia, like all other bookstore chains, has seen its revenues decline steadily in recent years.

Sales in Thalia bookstores in Austria, Germany and Switzerland, declined by 1.5 per cent, but overall sales revenues are up by 3.2 per cent with online sales accounting for 14 per cent of its total revenue due to Thalia launching its own ereader in 2011.

Earlier this year, French luxury apparels and accessories company LVMH Moet Hennessy Louis Vuitton SA was said to have been in talks to buy Douglas Holding.