October 5, 2017 / 2:20 PM / a year ago

UPDATE 1-Brazil exempts GPA from paying $48 mln shareholders claim

(Recasts to add details on case, share performance throughout)

SAO PAULO, Oct 5 (Reuters) - Brazil market watchdog has exempted GPA SA from indemnifying minority shareholders who claimed they should be paid a premium for agreeing to sell an appliance retailer that helped create subsidiary Via Varejo SA, putting an end to a year-old legal battle.

In a securities filing on Thursday, GPA said it was informed of watchdog CVM’s decision which was made a day earlier.

People familiar with the case had told Reuters that minority shareholders of Globex Utilidades SA sought 150 million reais ($48 million) from GPA in connection to their 2010 buyout.

The case started late in 2015, when GPA was forced to pay an additional 212 million reais to Globex’s controlling shareholder, Morzan Empreendimentos e Participações SA.

Lily Safra, Morzan’s owner and one of Brazil’s richest women, sued GPA three years ago for an alleged breach of contract related to the Globex sale.

GPA, Brazil’s No. 2 diversified retailer, is controlled by France’s Casino Guichard Perrachon SA.

According to GPA, the CVM decision exempts it from paying minority shareholders of Via Varejo any compensation related to the case. Last year, Casino put on the block a 43 percent stake in Via Varejo, but lackluster interest from potential buyers has slowed the process, Reuters said in February.

Preferred shares of São Paulo-based GPA rose 1 percent to 80.75 reais in late morning trading, while units of Via Varejo - a blend of the appliance retailer’s common and preferred stocks - rallied 3 percent to 25.65 reais.

$1 = 3.1369 reais Reporting by Guillermo Parra-Bernal and Ana Mano; Editing by Bernadette Baum

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