(Updates with results of auction)
SAO PAULO, July 14 (Reuters) - The founding family of Brazil's biggest retailer, GPA SA, sold almost all of its remaining stake in the company, now run by French group Casino, on Monday, raising 1.19 billion reais ($538 million).
The children of former GPA chairman Abilio Diniz sold the shares to diversify investments, according to Peninsula, the investment holding company for the Diniz family.
GPA's stock was down 2 percent after the auction, which moved 11.5 million shares for 103.58 reais each, according to BM&FBovespa SA, which operates the São Paulo Stock Exchange.
Abilio Diniz left GPA last year and sold his own stake in the company in May following a bitter dispute with Casino, which lost faith in the Brazilian tycoon after he attempted a merger with French rival Carrefour SA in 2011.
Diniz, who is now chairman of food processor BRF SA , has cleared himself of a noncompete clause under a former GPA shareholder deal. Reuters reported in March that he was a potential bidder for a stake of Carrefour's Brazilian unit, a possibility that Carrefour declined to comment on and Diniz representatives denied.
$1=2.21 Brazilian reais Reporting by Priscila Jordao and Marcela Ayres; Writing and additional reporting by Brad Haynes; editing by Peter Galloway