* Diniz wants Casino to speed up decision on ViaVarejo unit
* No formal bid for ViaVarejo has been submitted -source
* Diniz, Casino have been at odds since April 2011
* Diniz representative: no comment on potential negotiations
By Vivian Pereira and Guillermo Parra-Bernal
SAO PAULO, Nov 27 Casino Guichard Perrachon
, the controlling shareholder of Grupo Pão de Açúcar SA
, is not considering a sale of the Brazilian
retailer's home appliance unit even though Pão de Açúcar's
chairman has voiced interest in acquiring it, two sources
familiar with the situation told Reuters on Tuesday.
According to both sources, who declined to be quoted because
of the sensitivity of the issue, Casino is looking for ways to
improve the performance of ViaVarejo SA, as the unit is known.
One of the sources said that no offer has been made for
ViaVarejo, which is Brazil's biggest appliance chain.
Casino's stance comes as Pão de Açúcar Chairman Abilio Diniz
formally asked Casino to sell ViaVarejo to him, according to a
third source with direct knowledge of the situation. Diniz and
Casino have been at odds since April 2011, when the Brazilian
tycoon tried to engineer a merger with a rival without Casino's
Earlier this year, Casino, France's No. 2 retailer, took
control of Pão de Açúcar, which was founded by Diniz's father in
1948. 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.
Diniz and his family are in the process of selling their
voting shares in Pão de Açúcar to Casino through a put option
"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 third source. "But this indecisiveness is
bad for everyone."
Representatives of Casino in Paris and São Paulo declined to
comment. A Diniz representative declined to comment on any
potential negotiations between Diniz and Casino over ViaVarejo.
Brazilian media reports have highlighted the latest feud
between Diniz and Casino Chief Executive Jean-Charles Naouri.
Diniz was barred from a Casino meeting with Pão de Açúcar
management at the French retailer's Paris headquarters on
Monday, newspapers Valor Econômico and O Estado de S. Paulo
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 ViaVarejo, 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 Diniz representative confirmed that the Brazilian tycoon
was barred from the Paris meeting.
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 on Monday.
Serra resumed coverage of Pão de Açúcar shares with an
The decade-long business relationship between Diniz and
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.
The feud has been largely ignored by investors. 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 Reuters data.
Pão de Açúcar shares were down 0.5 percent at 92.54 reais in
Brazil on Tuesday.