Billionaire Diniz Said to Fund Carrefour Stake in Deal With BofA

  • Structured finance deal said valued at about 750 million euros
  • Diniz is considering increasing his stake in grocer Carrefour

Brazilian billionaire Abilio Diniz funded his purchase of shares in French grocery chain Carrefour SA through a financing deal valued at about 750 million euros ($850 million) with Bank of America Corp., people familiar with the matter said.

Diniz’s 525 million-euro acquisition of Carrefour shares, which increased his stake to more than 8 percent of the French company, was fully funded by a structured financing agreement, according to a disclosure to the French regulator last month, which didn’t name the bank involved. Diniz is considering increasing his stake further in the coming months, one of the people said, asking not to be named as the details aren’t public.

Diniz has been building his stake in Carrefour, becoming the company’s third-largest investor and working to win an appointment to the board. His investment company, Peninsula, also bought a 10 percent holding in Carrefour’s Brazilian unit in December. Carrefour has said it will propose Diniz’s nomination at a shareholder meeting in May.

Representatives for Bank of America and Peninsula declined to comment.

The deal, which has a maturity date of July 2021, is hedged against a depreciation in Carrefour shares, the disclosure said. Billionaire John Malone’s Liberty Global Plc entered into similar hedging transactions when it increased its stakes in ITV Plc last year.

The financing arrangement uses 30.75 million shares as an underlying asset, which are valued at about 750 million euros based on the share price on March 30, the date of the disclosure.

Diniz made his fortune in groceries, building the bakery his father founded into Brazil’s largest retailer. The billionaire tried unsuccessfully to combine Cia. Brasileira de Distribuicao Grupo Pao de Acucar with Carrefour five years ago in an attempt to undo an agreement to cede control to Casino Guichard-Perrachon SA. He stepped down as chairman of GPA in 2013.

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