Casino Starts Process to Become Sole Controller of Pao de Acucar
Casino Guichard-Perrachon (CO), the French owner of Franprix and Leader Price stores, took the first action to become the sole controller of Cia Brasileira de Distribuicao Grupo Pao de Acucar by appointing a new chairman for the Brazilian retailer’s holding company.
The Saint Etienne, France-based company sent a notice to Pao de Acucar Chairman Abilio Diniz informing him that Casino exercise its right to name the chairman of holding company Wilkes Participacoes SA, according to an e-mailed statement yesterday.
“Casino’s decision to exercise this contractual right will result in Casino becoming GPA’s sole controlling shareholder,” the company said, referring to Pao de Acucar. “With this step Casino demonstrates once again its long term commitment to Brazil.”
Casino and the Diniz family signed an agreement in 2005 to share the control of Wilkes, giving the French retailer the right to appoint its chairman this year. Last year, both parties became estranged after Diniz tried to merge the Brazilian retailer with the local unit of Carrefour SA, Casino’s biggest rival in France. Casino filed a complaint against its Brazilian partner and denounced the move as illegal and in violation of the 2005 shareholders agreement.
After rejecting Diniz’s proposal to merge Pao de Acucar with Carrefour, Casino increased its stake in the retailer to more than 40 percent.
Casino’s notice doesn’t alter the fact that its right to become the sole controller begins on June 22, Diniz said in a statement distributed by his press office.
Casino said on Feb. 28 it intends to exercise an option in June to gain full control of Pao de Acucar. The French company expects that more than 50 percent of revenue this year will come from “high-growth” countries in Latin America and Asia.
Casino rose 0.1 percent to close at 74.94 euros yesterday in Paris. The shares have advanced 15 percent this year. Pao de Acucar gained 0.3 percent to 84.28 reais in Sao Paulo and have risen 26 percent in the year.
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