(Update: analyst comments and stock prices)
PARIS (Agefi-Dow Jones)–The distributor Casino announced Monday evening that Grupo Pao de Açucar (GPA), its Brazilian subsidiary, plans to distribute to its shareholders approximately 83% of Grupo Exito, its Colombian subsidiary, and to retain a stake of around 13% which could be sold later.
“Casino’s board of directors met today and approved the principle of the planned separation of GPA and Grupo Exito in order to externalize the full value of Grupo Exito,” the French distributor said in a statement sent on Monday. evening. “Casino is also hoping for a reduction in the holding company discount applied to the valuation of GPA,” said a Paris-based analyst.
The market capitalization of Grupo Exito, a company listed in Colombia, is higher than that of GPA, listed in Brazil, while GPA holds almost 97% of the capital of Grupo Exito. GPA acquired Grupo Exito in November 2019 through a takeover bid.
Speculation is rife
GPA indicated last month that it had initiated preliminary studies with a view to separating its activities from those of Exito. The announcement of the terms of this transaction comes as the Brazilian press recently reported that merger or acquisition transactions involving Casino and Carrefour were under consideration.
Contacted by the agency Agefi-Dow Jones, a spokesperson for Casino denied these “market speculations”, while a representative of Carrefour did not wish to comment on them.
The proposed transaction is comparable to GPA’s spin-off of its Brazilian brand Assai, a cash and carry specialist, completed in March 2021. “Casino continues to dismantle its complex ownership structure in Latin America , which is in line with its broader objective of simplifying the group, while trying to unlock value and reduce leverage, over time,” comments JPMorgan.
The title Casino does not benefit from it
The distribution of Grupo Exito shares to GPA shareholders would take the form of Brazilian (BDR) and American (ADR) certificates of deposit, consistent with GPA’s shareholder structure.
Subject to the finalization of the analyzes and the obtaining of the necessary authorizations, the delivery of the Grupo Exito shares to the shareholders of GPA would take place during the first half of next year.
Following the operation, the Casino group would hold stakes in Latin America in three separate listed assets: Assai and GPA in Brazil, both held at 41%, and Grupo Exito in Colombia, with a direct holding of 34%, and an indirect holding via GPA’s 13% minority stake.
Following these announcements, Casino shares fell 0.4% to 12.41 euros. At the current rate, it is down about 47% since the start of the year.
-Dimitri Delmond, Agefi-Dow Jones; +33 (0)1 41 27 47 31; [email protected] ed: VLV – ECH
Agefi-Dow Jones The financial newswire
Dow Jones Newswires
September 06, 2022 09:05 ET (13:05 GMT)