Oct. 17 (Bloomberg) -- Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, rose the most in a week after saying it can’t legally unwind the deal that created its Via Varejo electronics subsidiary.
Shares gained 1.9 percent to 95.50 reais at the close of trading in Sao Paulo, the steepest gain since Oct. 8. The benchmark Bovespa index rose 0.6 percent.
Pao de Acucar said yesterday in a regulatory filing after the market closed that backpedaling on the deal that created Via Varejo is not possible because it’s “not retractable from the legal standpoint.” The filing was a response to a letter from the Klein family, which is Pao de Acucar’s partner on Via Varejo. The Kleins are asking for a review of the terms of the deal that created Via Varejo.
The Kleins controlled electronics retailer Casas Bahia, which Pao de Acucar acquired in 2010. Via Varejo was created from the merger of Casas Bahia with Pao de Acucar’s electronics retailer Ponto Frio.
Pao de Acucar owns 53 percent of Via Varejo and the Kleins, 47 percent. No details on the Kleins’s demands were released.
“Via Varejo accounts for an important part of Pao de Acucar’s revenue, so it’s positive that the company makes it clear that there’s no risk of undoing the merger,” Caue Pinheiro, an analyst at brokerage SLW Corretora, said by phone from Sao Paulo.
Via Varejo, together with Pao de Acucar’s e-commerce unit, reported sales of 6.1 billion reais ($3 billion) in the second quarter of 2012, while sales at other stores of Pao de Acucar totaled 7.4 billion reais.
Pao de Acucar has gained 43 percent this year, and the benchmark advanced 5.9 percent during that same period.
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