French retail group Carrefour said on August 30 that it would list shares in its property division on the Paris stock exchange to fund a share buyback scheme worth as much as 4.5 billion euros (6.1 billion dollars).
Cash raised from the initial public offering (IPO), estimated at around 3.0 billion euros, along with funds from the sale of "non-strategic" assets by the end of 2008 would fund the share buyback programme between 2008-2010. French billionaire Bernard Arnault and US investment fund Colony Capital jointly bought almost 10 percent of Carrefour in March and have pressed the company management to sell property.
In 2008, it expects to list 20 percent of the shares in Carrefour Property on the stock exchange, "subject to market conditions." The unit is to control roughly 60 percent of Carrefour's estimated total property value of between 20-24 billion euros, the statement said.
"Cash from divestments and the IPO (initial public offer) of Carrefour Property will be returned mainly via share buy-backs to maximise shareholder returns," it added. In addition to Carrefour stores and other real estate in France, Italy and Spain, the division is to own property in Turkey, Greece and Poland, board president Jose Luis Duran told a telephone press conference.
Carrefour also posted a first-half net profit of 729 million euros, an increase of 3.3 percent from the same period a year earlier. Since the beginning of this year, the group has spent around one billion euros to buy retailers in Brazil, Poland and Spain, while earning roughly the same amount from the sale of stores in Switzerland and Portugal.
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