Guyenne & Gascogne Stock Drops After Carrefour Makes Offer

Guyenne & Gascogne SA fell the most in a year and a half in Paris trading after Carrefour SA, Europe’s largest retailer, offered buy its main French franchisee for less than the stock’s trading price.

Guyenne, whose shares were suspended before the market opened yesterday, dropped as much as 7.7 percent to 80.87 euros, the biggest intraday decline since May 25, 2010, and was down 6.6 percent at 1:13 p.m. That narrowed the stock’s gain this year to 1.4 percent.

Carrefour said yesterday that it will pay investors owning about 57 percent of Guyenne’s capital 74.25 euros a share for about half their holdings and 3.9 Carrefour shares for each remaining Guyenne share. The franchise operator will pay an interim dividend of 7 euros a share prior to the closing of the offer, Boulogne-Billancourt, France-based Carrefour said.

Guyenne operates six Carrefour hypermarkets and 27 Carrefour Market supermarkets in southwestern France, according to the Bayonne-based company’s website. It also holds 50 percent of a joint venture with the retailer that owns 13 Carrefour hypermarkets in the country and has a stake in Carrefour’s Spanish business.

The Beau family and First Eagle Investment Management LLC, which together hold 41.45 percent of Guyenne, have agreed to a 12 month lock-up on the Carrefour shares they will receive in the offer, the retailer said.

Altis Put Option

Carrefour said in a separate statement yesterday it plans to exercise its put option on its 50 percent stake in Altis Group, another French franchisee, and will receive 153 million euros ($202 million) in cash for the holding.

“In all, the dilutive impact of this transaction for Carrefour should be about 1.5 percent on earnings,” Arnaud Joly, an analyst at CA Cheuvreux in Paris, wrote today in a note, referring to both announcements.

Carrefour shares were up 0.2 percent after rising as much as 1.5 percent. The stock has fallen 34 percent this year amid an extended sales slump at stores in France, where the company is revamping outlets, supplying more own-label goods and increasing promotions. The retailer lowered its 2011 profit forecast on Oct. 13, the second reduction in three months, saying it now expects a decline of as much as 20 percent.

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