Mercialys Gains After Announcing $1.7 Billion Dividend Plan: Paris Mover

Mercialys SA (MERY), the French shopping center owner controlled by Casino Guichard-Perrachon SA (CO), rose to the highest in five months in Paris trading after announcing a plan to distribute 1.25 billion euros ($1.7 billion) of one-time dividends this year.

The shares gained as much as 3.8 percent to 28.39 euros. The company will distribute 13.59 euros per share to investors in two installments, funded partly by the sale of as much as half of its shopping centers this year, according to a statement yesterday.

Casino Guichard-Perrachon will reduce its shareholding in Mercialys to about 35 percent from 51 percent. Mercialys manages shopping centers, most occupied by Casino supermarkets, and the adjacent arcades and restaurants. Mercialys, based in the French capital, aims to sell 500 million euros of small shopping centers to concentrate on large outlets that attract higher- paying retail brands.

“We expect this strategy to improve the resilience of our portfolio, maintain a robust growth - whatever changes in the macro environment are -- and increase the yield offered to investors,” Mercialys Chief Executive Officer Jacques Ehrmann said in the statement.

Mercialys rose 60.5 cents to 27.96 euros at 9:42 a.m. in Paris. Since Casino sold shares in Mercialys in an October 2005 initial public offering, the stock has returned 7.85 percent annually through dividends and price gains, according to data compiled by Bloomberg.

The company’s change in strategy was announced as Mercialys reported a 10 percent increase in funds from operations last year to 140.8 million euros, or 1.53 euros a share. Net asset value advanced 3.1 percent to 27.72 euros a share.

The company said it will sell about 500 million euros of bonds and expects to agree to 500 million euros of bank loans in coming months.

To contact the reporter on this story: Simon Packard in London at packard@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

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