French grocer Casino has made a request for arbitration with its fellow shareholder in Brazilian retailer CBD.
Casino confirmed today (31 May) that it yesterday filed for International Chamber of Commerce arbitration against the Diniz family.
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The move comes amid media speculation that the head of the family and CBD chairman Abilio Diniz had held preliminary merger talks with Casino’s French rival Carrefour.
On Sunday, The Wall Street Journal claimed that Mr Diniz had contacted Carrefour to discuss options to combine Carrefour’s Brazilian outlets with CBD. A person familiar with the matter told the WSJ that the talks were very preliminary. The person said that, although the savings that could result from a merger were attractive, there was no certainty a deal would be reached.
Last week, after reports that CBD and Carrefour had been in talks over a possible merger, the Brazilian company insisted it was not in any talks with the French retailer.
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In a statement to the Brazilian stock exchange, CBD also said Casino had told the company was “unaware” of any talks until disclosed by the press.
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By GlobalDataCBD said Casino had also stated that it had not authorised any third party to represent the French retailer’s interests in any discussions.
The statement also revealed that Mr Diniz had informed CBD that he was “always looking for the company’s growth opportunities” but that there was “no fact that could justify market disclosure”.
In its request for arbitration, Casino has said the Diniz family should “comply with and perform its obligations under the shareholders’ agreement” from 2006.
A Casino spokesman said the deal meant the Diniz family could not “negotiate strategic and structuring projects with a third party without involving us in these discussions and without our agreement”.
The spokesperson added that, without quesitoning the “economy” of the partnership, “which has demonstrated its efficiency”, Casino has entered arbitration to “protect the rights of the common company and its shareholders”.
Casino holds a 35% stake in CBD, with part of that stake held through an investment company called Wilkes. Through Wilkes, Casino co-controls CBD alongside the Diniz family.
In June 2012, Casino can exercise an option that will give it control of Wilkes and therefore CBD.
