Block trade seen as likely option over share offering
02/07/2025
Carrefour Brasil reported net income of R$221m in the third quarter of 2024, up 67.4% year over year
Península, the investment vehicle of the Diniz family, is in talks with banks to sell its 7.3% stake in Carrefour Brasil but has yet to select a lead advisor. With the retailer’s market capitalization at R$13.6 billion, the Diniz heirs’ stake is valued at R$992.8 million.
A block trade—the full sale of the stake in a single transaction—appears to be the preferred approach given the size of the position, the stock’s liquidity, and the success of similar deals in the current market, according to sources familiar with the matter.
Península is also one of the largest shareholders of the Carrefour group listed in Paris, holding an 8.83% stake worth approximately €812.4 million based on the company’s current €9.2 billion market cap. Carrefour’s shares have declined 17.4% over the past year on the Paris exchange.
Since the European stock is more liquid, Península may prioritize selling its stake in the French parent company first, though the final decision will depend on market conditions.
Abilio Diniz first acquired a stake in the French-controlled retailer in 2014 after a dispute with Jean-Charles Naouri, then head of Casino, over GPA. Mr. Diniz attempted to renegotiate the terms of GPA’s sale and even proposed merging Pão de Açúcar’s operations with Carrefour in Brazil, but the plan fell through.
In 2018, Península reduced its position in Carrefour Brasil, then valued at R$31 billion, from 11.46% to 8.91% through a R$805 million block trade on the B3 stock exchange. Today, the company is worth R$13.5 billion, with its shares down 41.72% over the past 12 months but up 18.04% year-to-date. The investment firm’s intention to sell its stake was first reported by O Globo columnist Lauro Jardim.
Península executives hold three of the 13 seats on Carrefour Brasil’s board of directors. Mr. Diniz previously served on Carrefour’s board in France before being replaced by Eduardo Rossi, who also represents Península on the Brazilian board.
In Brazil, Carrefour operates the Atacadão wholesale chain, Sam’s Club, Carrefour Hiper, Carrefour Bairro, Nacional, Super Bompreço, and Carrefour Express. It has also expanded into other segments with Carrefour Drogarias, Carrefour Posto, real estate arm Carrefour Property, and financial services through Banco Carrefour.
The planned stake sale could put additional pressure on Carrefour Brasil’s already discounted shares. Analysts at J.P. Morgan noted in a late-January report that Península’s stake is equivalent to roughly nine days of average trading volume.
Carrefour Brasil is currently trading at a price-to-earnings (P/E) ratio of 7 times its projected 2025 earnings. J.P. Morgan maintains a neutral rating on the stock with a price target of R$11.50, implying an 85% upside from its current level of R$6.23.
In the third quarter of 2024, Carrefour Brasil reported net income of R$221 million, up 67.4% year over year, driven by cost reductions, synergy gains, and operating leverage from sales growth. However, its EBITDA margin remained stable at 5.7%. The group has been working to improve margins at Atacadão by expanding its B2C offerings, adding in-store services such as bakeries, butcher counters, and deli sections.
When contacted, Península stated that it “does not comment on market rumors.”
The original story in Portuguese was first published on Valor’s business news website, Pipeline.
*By Silvia Rosa, Pipeline — São Paulo
Source: Valor International