New York, August 7 (FinanceEnquiry.com) – On Monday, Abilio Diniz, chairman of Cia. Brasileira de Distribuicao Grupo Pão de Açúcar, agreed on offloading part of his stake in Wilkes Participacoes SA, the holding company that is managing largest retailer of Brazil. Diniz informed about his next step that will be handing its control to French group Casino Guichard Perrachon SA (CO).
Providing the French retailer a greater part in the holding company as laid out in a shareholder agreement of 2005, an opportunity to offload Casino, a stake of 2.4 percent, in the investment holding company Wilkes worth $10.5 million was put in use by The Brazilian billionaire. Furthermore, after 2014, he has a second chance to offload remaining stake of Wilkes, which is equal to 47.6 percent between June 2014 and June 2022 to Casino and this has been mentioned in the agreement signed with the company.
On June 22, when the presidency of Wilkes was transferred to Chairman and Chief Executive Officer of Casino Jean Charles Naouri, just from that time, Casino became the only controller of Pao de Acucar. After having a dissension regarding ownership last year with Diniz, Naouri appointed a majority of Pão de Açúcar’s board of directors.
In addition, when the Brazilian magnate tried to arrange a merger with competitor of Casino- Carrefour, the strong relationship of both the two came to an end. As weak growth in Europe is assisted to be offset by a buoyant Brazilian middle class, continued operations in a market that is expected to overtake France very soon as the group’s most important source of revenue, are secured by Casino with this handover.
Moreover this, approximately 44 percent of Casino sales and about more than half its operating profit have already been represented by Brazil. On one hand, the benchmark Bovespa stock index grew by 1.9 percent, while on the other hand, shares of Pão de Açúcar skidded by 1 percent in Sao Paulo on August 6.
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