SAO PAULO/PARIS (Reuters) – French grocer Carrefour SA unveiled on Tuesday a proposal to take private its Brazilian unit Atacadao SA, also known as Carrefour Brasil.
The unit operates Carrefour supermarkets and wholesale stores under the Atacadao and Sam’s Club brands, contributing about 20% of the group’s global gross sales.
“Delisting the company will allow it to manage operations with more agility and enhanced focus on execution,” Carrefour said in a statement.
Under the proposal sent to Carrefour Brasil’s management, the French parent company offered to pay 7.70 reais ($1.34) per share of the Brazilian unit, an almost 20% premium over Monday’s closing price. Minority shareholders would be entitled to payment in Paris-listed shares of Carrefour, cash or both.
The deal could be worth some 5.3 billion reais ($920 million) at that price for Carrefour to buy the roughly one-third of shares it does not own in the Brazilian unit.
Shares in Carrefour Brasil rose around 10% on Tuesday.
Carrefour owns about 67% of the Brazilian unit, controlling the company together with Peninsula Participacoes, the holding company founded by the late Abilio Diniz.
Peninsula, also one of the largest shareholders of France’s Carrefour, directly holds about 7% of Carrefour Brasil.
“We are convinced that this decision represents an excellent opportunity for the group’s capital allocation and will generate sustainable value for our customers, employees, partners and shareholders,” Carrefour’s Chief Executive Alexandre Bompard said in a statement.
The deal, which is pending approval from Carrefour Brasil’s shareholders, is expected to be finalized in the second quarter, and would increase its earnings per share from the first year, Carrefour added.
Instead of cash, Carrefour Brasil shareholders could also choose to receive one Carrefour share for every 22 shares of the Brazilian unit. The offer also included an option for compensation in both cash and shares.
($1 = 5.7651 reais)
(Reporting by Andre Romani in Sao Paulo and GV De Clercq in Paris; Writing by Isabel Teles; Editing by Brad Haynes, Chris Reese, Aida Pelaez-Fernandez and Richard Chang)
