Colombia’s largest retailer Almacenes Exito SA plans to raise about 435 billion Colombian pesos ($223 million) from the sale of 30 million new shares to finance its expansion and the acquisition of the stake it doesn’t own in its unit Carulla Vivero SA.
The new shares will be first offered to existing shareholders within 15 business days. The price of the new shares was set at COP14,500 and the sale will be held within the next, the company said late Monday in a filing to the market regulator
In a separate filing, Exito said it will use the money to finance part of the acquisition of the 22.5% it doesn’t own in the retailer Carulla Vivero SA.
“The acquisition of the stake in Carulla will be good for the company, which will totally merge the two companies and will be able to save on administration costs and, possibly, on taxes,” said Mauricio Restrepo, a market analyst with Bolsa y Renta.
Exito had acquired a controlling stake in Carulla in 2007 and committed to buy the remainder before March 2010.
The stake in Carulla is worth about the same as the COP435 billion Exito will raise from the new shares, Restrepo said. The retailer will offer to pay Carulla shareholders with new shares of up to 14 million shares.
After the transaction, Exito will still have some COP200 billion in cash to expand in Colombia, he said.
Shares of Exito, which is controlled by French retailer Casino Guichard-Perrachon SA, Tuesday fell 3.6% to COP16,000.
“People are less interested to buy at the market price when they know new shares will be up for sale at COP14,500 and the holders can sell now and they will have the right to buy new shares at COP14,500 in a couple of weeks,” said Jairo Agudelo, a market analyst with local brokerage Interbolsa. He expects the share price to rise to COP18,574 by the end of the year and will further rise after the operation.
Exitos’s shares trade over the counter in New York.