* Diniz wants Casino to speed up decision on unit
* Negotiations already underway-sources
* No formal bid for ViaVarejo has been submitted
By Vivian Pereira and Guillermo Parra-Bernal
SAO PAULO, Nov 27 In a bid to end a bitter feud,
the chairman of Brazilian retailer Grupo Pão de Açúcar SA has
formally asked its controlling shareholder to sell its ViaVarejo
home appliance unit to him, a source with knowledge of the
situation told Reuters on Tuesday.
The chairman, Abilio Diniz, is looking to win control of
ViaVarejo, Brazil's largest home appliances retailer, from Pão
de Açúcar, according to the source, who declined to
be identified due to the sensitivity of the issue.
Earlier this year, French retailing group Casino Guichard
Perrachon took control of Pão de Açúcar, which was founded by
Diniz' father in 1948.
Diniz and Casino have been at odds since April
2011, when Diniz tried to engineer a merger with a rival without
A sale of ViaVarejo to Diniz, a move that could facilitate
his exit from Pão de Açúcar, is seen by analysts and investors
as the most effective way to end the dispute between both
Diniz and his family are currently in the process of selling
their voting shares in Pão de Açúcar to Casino through a put
"Abilio is fully interested in seeing the negotiations make
progress ... Casino has already said that it has no interest in
owning consumer electronics businesses it doesn't own
elsewhere," said the source. "But this indecisiveness is bad for
The decade-long business relationship between Diniz and
Casino Chief Executive Jean-Charles Naouri was shattered last
year, when the Brazilian tycoon tried to orchestrate the merger
with Carrefour SA, Casino's archrival in France.
Naouri accused him of trying to break their agreement and
threatened lawsuits to hold on to Pão de Açúcar.
Brazilian media reports have highlighted the latest feud
between the businessmen. Diniz was barred from a Casino meeting
with Pão de Açucar management at the French retailer's Paris
headquarters on Monday, newspapers Valor Econômico and O Estado
de S. Paulo reported.
According to Valor, Diniz sent a letter on Sunday to Naouri,
explicitly seeking control of ViaVarejo. The letter said it was
necessary to decide the fate of Via Varejo, adding that "the
lack of a decision on the matter" could be "damaging" for Pão de
Açúcar and the unit, Valor reported.
Diniz could swap his 6.5 billion reais ($3.1 billion) stake
in Pão de Açúcar for ViaVarejo, and still receive another 1.5
billion reais from Pão de Açúcar for his exit, the newspaper
reported, without citing sources.
The two men have exchanged angry letters, according to the
papers. Diniz argued that his presence at the meeting "was
necessary," while Naouri replied that the meeting was to discuss
Casino's goals for the company and Diniz was not entitled to be
there, Estado said.
Estado reported that Diniz was forced to wait in Casino's
reception area for more than 40 minutes on Monday. While
waiting, he sent a letter and several emails to Naouri.
"Regarding ViaVarejo, Casino would likely sell control only
if it were to receive a fair value, which would benefit Pão de
Açúcar shareholders," wrote Morgan Stanley & Co analyst Lore
Serra in a client note Monday.
Serra resumed coverage of Pão de Açúcar shares with an
A second source said no formal offer for ViaVarejo has been
submitted to Casino.
A Diniz representative confirmed that Diniz was barred from
the Paris meeting. She declined to comment on any potential
negotiations between Diniz and Casino over ViaVarejo.
Calls to two Casino representatives in Brazil were not
Pão de Açúcar shares have gained 40 percent this year and
are trading at 26 times expected 2013 earnings - above the 21
times the average of 11 global rivals, according to Thomson