April 29, 2016 / 12:57 PM / 2 years ago

France's Casino considers taking CNova private, source says

SAO PAULO, April 29 (Reuters) - French retailer Casino Guichard Perrachon SA is considering taking CNova NV private as the best option prior to a planned absorption of the underperforming e-commerce unit, a source with direct knowledge of the matter told Reuters on Friday.

Under the plan, Casino would buy out minority shareholders in CNova, which would subsequently be split into three separate units located in France, Brazil and Colombia, said the source, who requested anonymity because the structure of the transaction is under discussion.

CNova’s French unit CDiscount would be absorbed by Casino’s French business, while Nova.com, as CNova’s Brazilian section is known, would be merged into Via Varejo SA, Casino’s appliance and consumer electronics unit in the country, the source added.

Casino listed CNova on Nasdaq in November 2014. On Thursday, CNova said that a merger of its Brazilian unit with Via Varejo is being reviewed.

According to the source, Casino would fund the buyout with proceeds from the $1.1 billion sale of a Vietnamese grocery chain to Thai billionaire Charoen Sirivadhanabhakdi’s TCC Holding Co, which was announced on Friday. Casino has this year raised almost $4.5 billion from asset sales in Asia to reduce debt.

The Paris-based media office for Casino did not have an immediate comment.

About 6 percent of CNova’s 441 million shares are publicly traded on the Nasdaq market, making it relatively cheap for Casino to delist the unit, the source said. Based on current prices, the value of a delisting could be about $100 million.

CNova has a market value of about $1.46 billion, with between 40 percent to 45 percent being attributed to the Brazilian business, the source added.

Casino, based in the French city of St-Etienne, took Cnova public in its drive to create an e-commerce pure-play that could fund the expansion of its direct-sales business and marketplaces amid thriving global prospects for the sector.

The IPO priced CNova at $7 a share, helping the French retailer raise a net $190 million at the time. The price came in below Casino’s target of $12.50 to $14 for the stock.

That year, rival China’s Alibaba Group Holding Ltd broke a global record after fetching $25 billion in an initial public offering. (Additional reporting by Dominique Vidalon in Paris Editing by W Simon)

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