Preliminary Discussions for GPA Shares

By Luciana Magalhaes and Paula Laier

SAO PAULO (Reuters) – Brazilian investor Nelson Tanure has initiated preliminary discussions with French retailer Casino (EPA:CASP) about buying at least part of its shares in supermarket operator GPA, according to a source familiar with the matter. This move may add to a stake amassed by funds allied to Tanure in recent days.

Tanure, who generally invests in distressed companies, recently agreed to acquire the Brazilian arm of Spanish supermarket chain Dia, which has undergone restructuring proceedings.

Tanure declined to comment, and Casino, which owns a 22.5% stake in GPA, did not respond immediately to requests for comments.

The source stated that talks are still "superficial" and involve demonstrating "intentions".

Earlier Monday, GPA announced in a regulatory filing that funds managed by Reag Trust Administradora de Recursos had acquired a 9.56% stake in GPA, including some operations involving derivatives. These deals were funded by Tanure, as indicated by the same source. The news caused GPA shares to rise by 14% in Monday's trading.

Looking ahead, Tanure is considering proposing a merger between Dia and GPA, contingent on regulatory approval, the source added. Valor Economico newspaper first reported Tanure’s interest in merging the two companies.

After years of debt-fueled acquisitions, Casino has restructured its operations to prevent bankruptcy. In March, GPA completed a primary offering of new shares, during which Casino relinquished its controlling stake in the firm as part of its strategic withdrawal from Latin America.