Shares in Carrefour, the world’s second largest grocery retailer, have been boosted today (31 January) on the back of reports that it may be split into three parts to boost value to investors.
Shares today have risen as high as EUR35.1 (US$48.1) a share, up 3.3% and were trading at EUR34.7 at 13:02 CET.
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According to reports in Le Figaro today, Carrefour may create separate stock exchange listings for its Dia discount chain and real estate units.
This follows speculation earlier this month that the retailer may be looking to dispose of the two units to help boost its share price.
According to RBS analyst Justin Scarborough, a sale of a 49% stake in Carrefour Property and Dia would raise EUR5bn, or an IPO would raise EUR7.8 a share.
However he suggested that the “value creation from the move” is not as simple as some have suggested, with questions remaining around the value of the businesses, whether Carrefour would sell the entire businesses or do partial IPOs and what impacts the move would have on its P&L and valuations.
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By GlobalDataShares in the retailer have fallen by 12% in the past three months, driven down by two profit warnings in October and November and accounting irregularities in Brazil that will cost an exceptional one-off charge of EUR550m.
Morningstar analyst Philip Gorham told just-food earlier this month that he could understand why the retailer might look to dispose of some of its hard-discount operations due to “stiff competition” from the likes of Aldi.
Meanwhile he suggested the that the timing may not be right to dispose of its property assets. He said: “Why sell in what is still a fairly illiquid market and prices remain weak from a year or two ago?”
