PARIS Carrefour (CARR.PA), the world's second-largest retailer, said it had taken a preliminary step toward a possible stock market listing for its Brazilian arm, via the publication of a prospectus for that market flotation.
Atacadão S.A., the parent company of Carrefour's Brazilian activities, had filed with the Brazilian Securities Commission (CVM) a draft preliminary prospectus in the context of its previously-announced plan to list its shares on the Novo Mercado market, Carrefour said in a statement.
Carrefour shares were up 2.1 percent, among the top-performing stocks on France's benchmark CAC-40 index .FCHI which was down 0.1 percent.
Bernstein analyst Bruno Monteyne said in a research note that a Brazilian initial public offering (IPO) could add 1-2 euros to Carrefour's share price.
"We expect Carrefour to sell a 10 to 15 percent stake, generating 950 million euros ($1.1 billion) to 1.45 billion euros in cash. This cash could be put to use pursuing small M&A opportunities or purchasing cheap retail sites given the recent recession in Brazil," said Monteyne, who has a "market perform" rating on Carrefour's shares.
Carrefour has targeted an initial public offering for the Brazilian unit this year, market conditions permitting, in order to accelerate its expansion in that country, which is its second-largest market after France.
Brazilian tycoon Abilio Diniz, who is a key Carrefour shareholder, told Reuters in March that an IPO could take place in mid-2017, given signs that Brazil's economy was emerging from the worst recession in its history.
A Carrefour spokeswoman said on Wednesday that the filing of the prospectus, which contains financial information on Carrefour's Brazil business, was a preparatory and technical step ahead of the possible Brazil IPO.
(Reporting by Dominique Vidalon, Pascale Denis; Additional reporting by Gabriela Mello in Sao Paulo; Editing by Sudip Kar-Gupta)