Diniz Pays Premium in Quest for Brasil Foods: Corporate Brazil

Brazilian billionaire Abilio Diniz, vying to become chairman of BRF-Brasil Foods SA, is paying the highest premium in at least 2 1/2 years to gain influence with shareholders.

Diniz, who ceded control of retailer Cia. Brasileira de Distribuicao Grupo Pao de Acucar to Casino Guichard-Perrachon SA last year, sold 1.5 billion reais ($753 million) worth of Pao de Acucar non-voting shares on Jan. 11 and bought 1 billion reais of Brasil Foods stock, according to a person with direct knowledge of the matter, who asked not to be named because the numbers aren’t public. Brasil Foods, the nation’s largest processed-food maker, trades at 99 times its trailing 12-month earnings, almost four times Pao de Acucar’s ratio of 25. The spread between them reached a 2 1/2-year high on Jan. 23.