Jaime Gilinski made an unsolicited $836 million cash offer for Colombian retailer Almacenes Exito just a month after the billionaire banker reached a deal to take control of the country’s largest food maker.
Gilinski’s binding bid to acquire a 96.52% equity interest in Exito from Cia Brasileira de Distribuição, using Campbelltown Inc. or another entity, was made public late Wednesday in a regulatory filing. Shares of GPA, as the company is known, climbed about 16% in trading in Sao Paulo Thursday, reversing a year-to-date slide.
If successful, the deal would give Gilinski ownership of one of Colombia’s most prominent companies, which runs more than 500 grocery and retail stores throughout the country and has operations in Uruguay and Argentina. It comes fresh off an agreement Gilinski and Abu Dhabi’s royal family reached to obtain control of food producer Grupo Nutresa, ending a protracted takeover struggle against the country’s most powerful business group.
Gilinski’s bid for Exito does not involve the royal family, according to a person familiar with the matter. A public tender offer would be launched to carry out the transaction, subject to regulatory approvals, GPA said in the filing. The offer expires on July 7.
Banco Bradesco BBI analyst Felipe Cassimiro said Sao Paulo-based GPA has been struggling with weak earnings momentum and efforts to revive sales and margins.
“We see the 4 billion reais cash equity offer as an exit option,” he wrote in a note. “GPA should take it.”
Read more: Billionaire Gilinski Signs Stock Deal for Colombia Foodmaker
French retail giant Casino Guichard-Perrachon SA, which owns 41% of GPA, said this week that GPA and Exito may be sold as part of a three-year plan for the assets, but that no timetable, defined targets or open sale process for GPA exists.
Casino’s stock plummeted to a record low on Thursday after it warned shareholders would be “massively diluted” as part of a restructuring. It is proposing a deal in which creditors would swap at least some of their holdings for equity. Casino said this week it needs an equity boost of €900 million ($981 million) or more.
Read also: Casino’s Stock Tumbles as Grocer Warns of Shareholder Wipeout
GPA said its management promptly flagged Gilinski’s offer to the company board, which will meet to study it. Exito separately published the GPA filing in Colombia, saying that it too would keep the market informed about the offer.
In 2019, Casino started a process to simplify the structure of its Latin America holdings, putting control of Exito under GPA.
--With assistance from Vinícius Andrade and Andrea Jaramillo.
(Updates GPA stock move in second paragraph, adds analyst comment in fifth)