UPDATE 1-Blue Capital raises Carrefour stake to 10.7 pct

(Adds further detail, background)

By Noelle Mennella and Sudip Kar-Gupta

PARIS, April 11 (Reuters) - Blue Capital, a holding company owned by billionaire Bernard Arnault and property group Colony Capital, said on Friday it had raised its stake in French supermarket retailer Carrefour (CARR.PA: Quote, Profile, Research) to 10.7 percent.

Blue Capital, which previously held 9.1 percent, added that it would seek an extra seat on Carrefour's board and could further raise its stake in the company.

Arnault and Colony Capital have been gradually building up their influence in Carrefour, the world's second-biggest hypermarket retailer behind Wal-Mart (WMT.N: Quote, Profile, Research), since first becoming shareholders in Carrefour a year ago.

Last year, Arnault's key aide Nicolas Bazire and Colony Capital executive Sebastien Bazin won seats on Carrefour's supervisory board.

Along with many retailers, Carrefour has been under pressure to generate value from its lucrative property assets and Blue Capital said it was confident in Carrefour's ability to generate value for its shareholders.

"Blue Capital's increased stake in Carrefour confirms its confidence in the potential for value creation and the strategic nature of its investment," it said in a statement.

"Blue Capital, which will play a full role in the company in its capacity as largest single shareholder, reiterates its confidence in Carrefour's management in exploiting this value creation potential."