Tuesday, October 16, 2012

Pao de Acucar partners threaten arbitration over 2010 merger

* Kleins swapped Casas Bahia for 47 pct of Via Varejo unit

* Lawyer says audit reveals possible issue with swap ratio

Oct 15 (Reuters) - A minority partner in Pao de Acucar's home appliance and online retail unit has found possible problems with the terms of the 2010 merger that helped turn the company into Brazil's biggest retailer and may seek arbitration to settle the matter.

A lawyer for the Klein family, which founded the Casas Bahia chain before merging it with Pao de Acucar's operations for a 47 percent stake in the unit now known as Via Varejo, said audits have uncovered possible issues with the terms of the 2010 deal.

"If confirmed, it may have relevance in the exchange ratio that was used," lawyer Ivo Waisberg told Reuters.

The legal maneuvering highlights lingering tensions between the retailer's biggest shareholders. Their simmering distrust threatened to break up the group earlier this year, before Chairman Abilio Diniz handed control over to French retailer Casino in June.

Waisberg said the Klein family had given Pao de Acucar 30 days to negotiate before going to arbitration. Representatives for the retailer declined to comment.

Source:  http://www.reuters.com/article/2012/10/16/paodeacucar-viavarejo-idUSL1E8LG06W20121016

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