MADRID, Aug 12 (Reuters) - A 1 billion euro ($1.12 billion) Qatari investment in Spain's El Corte Ingles has triggered a boardroom spat at the family-owned department store group, amid accusations from one minority shareholder on Wednesday that the deal undervalues the firm.
El Corte Ingles, one of the country's best-loved retailers, said in July former Qatari Prime Minister Sheikh Hamad Bin Jassim Bin Jaber Al Thani was purchasing a 10 percent stake in the company.
Corporacion Ceslar -- a vehicle grouping together the stakes of one offshoot of the founding family behind El Cortes Ingles -- said in a statement on Wednesday the Qatari investment meant "an unacceptable loss of value for shareholders."
"(It) leaves El Corte Ingles well below all the valuations that have been carried out," said Ceslar, which holds almost 10 percent of the company and has a seat on the board. Just the buildings owned by El Corte Ingles were valued at 18 billion euros by property experts in 2013, Ceslar added.
The complaint by Ceslar is the first public sign of a rift at the privately-owned company -- one of Spain's biggest employers and one of Europe's largest retailers. Its stores sell food, clothing and household goods and also operate businesses such as insurance, travel booking and ticketing for concerts.
Its majority shareholder is a foundation named after Ramon Areces, who set up the retailer in the 1930s. Other descendents of his also own sizeable stakes in the company.
The Qatari investment will be done through a three-year loan, convertible into El Corte Ingles shares that will be taken out of treasury stock.
Ceslar said the structure of the deal meant the Qatari group, known as Primefin, could end up taking a 12.5 to 15.25 percent stake in El Corte Ingles, rather than the 10 percent flagged by the company.
It added the terms of the loan were unnecessarily costly. According to Ceslar, it carries an annual interest rate of 5.25 percent -- above the levels El Corte Ingles has paid to finance itself in the bond market -- which could jump to 7.5 percent if certain conditions are not met.
El Corte Ingles declined to comment.
$1 = 0.8948 euros Reporting by Carlos Ruano and Sarah White; Editing by Mark Potter