By Anthony Shevlin
Casino Guichard-Perrachon Brazilian subsidiary Companhia Brasileira de Distribuicao Grupo Pao de Acucar (PCAR4.BR) said Wednesday that it approved the sale of its stake in electronics retailer Via Varejo.
Grupo Pao de Acucar, which has a network of over 1,100 stores in Brazil, said it would accept a minimum price of 4.75 Brazilian reais per share for its 36.27% stake in Via Varejo.
The company said it received a letter from Michael Klein--whose family owns a 25.43% stake in Via Varejo--saying he would submit individually, or with other investors, one or more purchase orders for Pao de Acucar's shareholding for a maximum price of BRL4.75.
Pao de Acucar said it would keep the market and shareholders informed of any new information related to the sale.
Last year, Raymond James analysts said Casino's activity in Brazil had been detrimental to investor perception.
"We believe that corporate action might be among the much-needed short-term catalysts to reassure investors," Raymond James said, and highlighted the long-expected disposal of Via Varejo in Brazil as a potential action.
The French retailer is currently in the midst of an asset-disposal program. Bryan Garnier analysts said the sale of Via Varejo remained a major catalyst to ease market concerns.
Casino has been also been beset by a string of bad news in recent months, including rating downgrades by Standard & Poor's and Moody's.
Last month, its shares were halted following a sharp fall after shares in its parent company, Rallye, were suspended from the Euronext Paris exchange.
HSBC analysts say both the shrinking of Casino's business and its margin-maximization strategy could undermine the French group's long-term strategic position
Write to Anthony Shevlin at firstname.lastname@example.org; @anthony_shevlin