UPDATE 1-Brazil tycoon Diniz mulls large property sale - sources

miércoles 18 de febrero de 2015 10:15 GYT
 

(Adds details on assets, Diniz investments, alternatives)

By Guillermo Parra-Bernal

SAO PAULO Feb 18 (Reuters) - Brazilian billionaire Abilio Diniz is considering selling a large portfolio of commercial properties for about 2 billion reais ($706 million), a move that would give him extra funds to ramp up his investment in France's Carrefour SA, two sources with direct knowledge of the plans said.

Península Participações, the investment vehicle overseeing Diniz's fortune, has discussed the sale of 62 supermarkets with Canada Pension Plan Investment Board, Brookfield Asset Management Inc and BR Properties SA, said the first source, who requested anonymity because the talks remain private.

Diniz, 78, bought a 10 percent stake in Carrefour's Brazilian unit for 1.8 billion reais in December and has an option to raise that to 16 percent over five years. He also acquired a 2.4 percent stake in Paris-listed Carrefour last year.

Diniz signed 40-year leases for the supermarkets with GPA SA about 10 years ago, when he still chaired the company. He left GPA in September 2013 after losing a battle for control of the company to France's Casino Guichard Perrachon & Cie.

Last month, the Diniz family simplified the legal structure of a half-dozen investment vehicles running the stores, facilitating a potential sale. The length of the rental contracts with GPA as well as the "relative liquidity" of the properties make the portfolio "attractive from any standpoint," said the second source.

A Península spokeswoman said on Wednesday that the São Paulo-based investment firm had no plans to sell the stores. CPPIB and BR Properties declined to comment. Efforts to reach Brookfield were unsuccessful.

GPA, Brazil's largest retailer and Carrefour's archrival, has the right of first refusal for the stores, although neither source expects the company or Casino to exercise it. Diniz's asking price for the stores equals 11 times annual rent proceeds, which may total about 185 million reais this year, the first source said.   Continuación...