PARIS Toyota Tsusho Corp (8015.T) has agreed to buy a 29.8 percent stake in distribution firm CFAO CFAO.PA from French luxury and retail group PPR (PRTP.PA) and may launch an offer for the whole company valuing it at 2.3 billion euros ($2.79 billion).
The Japanese conglomerate is paying 37.50 euros a share for the stake in CFAO and any offer for the remainder of the group would be at the same price, PPR said in a statement on Thursday.
That is below where CFAO shares closed on Wednesday, but the distributor of vehicles and medicines in Africa and French overseas territories had already rallied 44 percent this year.
CFAO shares were trading up 4.9 percent at 39.64 by 03.35 a.m. EDT, above the offer price. Shares in PPR were 2.6 percent higher at 111.35 euros, among the top gainers on France's blue-chip CAC 40 index .FCHI.
PPR has agreed to tender its remaining 12.2 percent stake in CFAO to any full offer, while Toyota Tsusho has accepted to pay an indemnity of 50 million euros to PPR in case it does not file a voluntary tender offer by September 15.
Toyota Tsusho will proceed with the tender offer once it performs due diligence on CFAO's non-automotive businesses in the coming weeks, PPR said.
The French luxury goods company would receive 967.5 million euros for its entire 42 stake.
CFAO generated sales of 3.1 billion in 2011. PPR sold nearly 58 percent of CFAO in a stock market listing in late 2009.
Japanese conglomerate Toyota Tsusho has been expanding its automotive distribution business as well as other businesses such as energy, healthcare products, chemicals, machinery and consumer products.
($1 = 0.8248 euros)
(Reporting by Elena Berton and James Regan; Editing by Christian Plumb)