Shares in Arcandor (AROG.DE) fell more than 21 percent, making them the top decliners among German midcaps .MDAXI, as investors prepare for likelihood the retailer will enter the next stage of its insolvency and begin liquidation next week.

DZ Bank lowered its price target to a symbolic 0.01 euros, saying that it is unlikely Arcandor will raise enough money through asset sales to pay all obligations it owes.

Sources have said Arcandor's 43.9 percent stake in Thomas Cook (TCG.L) is set to be off-loaded via a share placing in early September.

The stake in Thomas Cook is held by banks and bondholders as collateral against a 1.5 billion euro ($2.12 billion) loan taken out by Arcandor.

A further 8 percent stake was used by Arcandor to back a convertible bond.

"The price movements we're seeing at Arcandor are typical for a company in this situation. We will likely see the share price fall further in the short term," says a Frankfurt-based trader.

Insolvency administrator Klaus Hubert Goerg said in mid-August that he was looking at closing 19 of the company's 126 department and sporting good stores and saw a 90 percent chance the company could survive insolvency.