Casino Guichard-Perrachon SA, the French retailer, rose to the highest in almost 13 years after saying it will merge its Cdiscount and Nova Pontocom e-commerce units, and that it may spin them off in a U.S. stock offering.
The stock rose 3.6 percent to 92.30 euros in Paris, the highest since July 2001. The new online division will have customers from Brazil to Vietnam, with combined annual business volume -- sales plus the value of other people’s transactions on the sites -- of $4.1 billion based on 2013 results, Casino said late yesterday.
“This is a natural migration from the offline world into the online world,” said Bruno Monteyne, an analyst at Sanford C. Bernstein. “Casino is following the customer.”
Chief Executive Officer Jean-Charles Naouri is introducing new formats such as cash-and-carry in Thailand and online stores in South America, where revenue growth is strongest, while cutting prices at home to revive sales. By pooling its e-commerce assets and spinning them off, the supermarket operator would seek to ride a wave of investor enthusiasm for technology and Internet companies with exposure to emerging markets.
The sale of the two online units could be worth 1.9 billion euros ($2.6 billion), Rickin Thakrar, an analyst at Espirito Santo Investment Bank, wrote in a note.
Naouri is “a talented financier,” said Gildas Aitamer, an analyst at Planet Retail. “All through his years heading Groupe Casino, he played a skillful balancing act to optimize the assets in order to finance further expansion while maintaining control over its different operations, and this move is unlikely to differ.”
Casino’s stock has gained 10 percent this year, compared with an 8 percent decline for French rival Carrefour SA.
Selling shares in the new entity would “accelerate its development and increase its visibility,” Saint-Etienne, France-based Casino said in a statement late yesterday.
France’s Cdiscount, which opened websites in Colombia, Thailand and Vietnam in the first quarter, sells everything from lingerie to scooters on its web platform. It had business volumes of $2.1 billion in 2013, according to Casino.
Nova, the e-commerce company jointly held by Cia. Brasileira de Distribuicao, known as GPA, and its Via Varejo SA unit, garnered volumes of $2 billion last year. It operates five consumer online retailers whose offerings range from travel to technology as well as an e-commerce consulting business.
GPA shares rose 0.1 percent to 104.68 reais in Sao Paulo today. Via Varejo declined 2 percent to 24.40 reais.
Casino gained control of GPA, Brazil’s largest retailer, in September after billionaire Abilio Diniz resigned as chairman. The planned combination will be studied by both companies and submitted for approval, Casino said yesterday without giving a time frame.
Morgan Stanley and JPMorgan Chase & Co. were hired to manage a potential share sale of the combined units, Reuters reported, citing a source with direct knowledge of the situation. A Casino spokeswoman declined to comment on the hiring of bankers.