El Corte Ingles will resist any IPO moves -sources

By Elena Moya

LONDON, July 5 (Reuters) - Spain's El Corte Ingles will continue to resist any pressure for a flotation, with a court battle with shareholders likely to drag on for years, people familiar with the company's plans said.

The retailer, one of Europe's largest department store chains, is eyeing expansion in Italy and France as well as planning new stores in Spain, the sources said.

This will be financed with its own funds, they added.

"At present, no other shareholders want to sell. There are no IPO plans," one of the sources said. "The court battle will take years to solve."

El Corte Ingles intends to appeal an April court decision that allows a group of shareholders to sell their stock at prices based on typical valuation formulas for other listed retailers instead of the book value the company wanted to pay.

The ruling means the chain must pay a dissident investor group headed by Cesar Areces Fuentes, which controls less than 3 percent of the stock, 98.5 million euros ($133.8 million) instead of the 35 million the firm said the stake was worth.

Since the ruling, investors and analysts have speculated that other investors would want to push for a flotation to exit the company at the higher price.

Almost half of the company's shares are owned by Fundacion Areces, which inherited most of the fortune of founder Ramon Areces.

The foundation is led by Isidoro Alvarez, the 74-year-old chairman of El Corte Ingles who through the foundation and his own stake legally represents about 57 percent of the stock, the sources said.

Two other families have another significant stake of between 10 and 20 percent, while more than 3,000 directors own the rest. EXPANSION

The company posted net profit of 653 million euros last year on sales of 15.9 billion euros, according to its Web site.

El Corte Ingles has 67 stores with an average of 30,000 square metres of shopping space in each. They sell everything from pianos to tweezers to vintage wine and counted footballer David Beckham as one of many famous customers.

A flotation of El Corte Ingles, valued at about 13 billion euros by the McKinsey consultancy, is the most awaited stock market listing in Spain.

"They are a cash cow," said Jose Ruiz, a retail analyst at Kepler-Landsbanki in Madrid. "They don't need the cash to expand. All their growth is organic, and it doesn't look as if there are changes in ownership that would lead to an IPO."