Carrefour to Sell 20% of Property Unit

New York Times - August 30, 2007

Carrefour, the French supermarket chain and the world’s second-biggest retailer, said Thursday that it planned to sell part of its real estate portfolio in an initial public offering, bowing to pressure from investors including the French billionaire Bernard Arnault.

The company will sell a 20 percent stake in its Carrefour property unit next year. The unit owns 280 superstores and 540 smaller supermarkets in Europe — 60 percent of Carrefour’s real estate.

More than five months ago, Mr. Arnault, the richest man in France and chairman of the fashion house Christian Dior, teamed up with Colony Capital, an American real estate investment firm, to acquire almost 10 percent of Carrefour, with an eye toward its real estate, valued at 24 billion euros (nearly $33 billion).

Carrefour, which is surpassed among retailers only by Wal-Mart, said Thursday that it expected the sale to raise about 3 billion euros ($4.1 billion). Combined with proceeds from divestments of stores in Portugal, Switzerland and other countries, it will help Carrefour buy back as much as 4.5 billion euros’ ($6.13 billion) worth of its own stock.

“It creates value for shareholders and it makes sense,” said Alexandre Iatrides, an analyst at Richelieu Finance in Paris. “Carrefour at the beginning didn’t like it, but more and more distribution companies are selling their real estate.” Sphere: Related Content