Carrefour Capital & Blue spring pressure from Knight Vinke

The management of Carrefour and the two major shareholders of the distributor, the funds Colony and Groupe Arnault, will face the pressures of a newcomer, the American Knight Vinke, which opposed the proposed division of the French group.

Knight Vinke, which owns more than 1% stake in Carrefour, objecting to the proposed division of a subsidiary part of the land (Carrefour Property) and all of the subsidiary hard discount (Dia) of the second global distributor .

"We confirm to talk to major shareholders of Carrefour to gather their opinions about the projects recently announced by Carrefour, "said on Wednesday a spokesman for the fund.
When questioned, Carrefour declined to comment.

"Looking at the history of Knight Vinke, we see that it has had some success when he tried to influence the strategy groups in which he had entered, "said one analyst who requested anonymity.

The U.S. activist fund has revealed its participation hold just one week after the announcement of a proposed division of Carrefour badly received by investors.


To counter the plans of Carrefour, he must, according to calculations by analysts to convince approximately 25% of Group shareholders, assuming that about 75% of voters are represented on average an extraordinary general meeting and that must obtain a third of the votes to roll over the project.

The meeting will be held Carrefour June 21

FUND ACTIVE IN OTHER BUSINESS

Knight Vinke has a tactic to acquire small investments in large groups and then persuade the shareholders to change the strategy of the company.

He has already put pressure on the banking group HSBC and has contributed to the split and the IPO of Suez Environment to facilitate the merger between GDF and Suez.

After two successive profit warning, the number two worldwide distribution behind the American Wal Mart was for months under pressure from Blue Capital, the structure involving the two major shareholders of the group, the fund Colony and Arnault group, holding family Bernard Arnault, CEO of LVMH (who own 14% of capital and more than 20% of voting rights), to outsource value.

The special dividends paid to shareholders the opportunity to reach the split, according to Carrefour, 4.09 billion euros.

Shareholders of the Group since March 2007, Groupe Arnault and Colony have acquired their interest at an average price estimated at approximately 47 euros per share, a level still well above the current share price, and which is added the cost of debt incurred to finance their participation.

The proposed IPO of 25% of Carrefour Property and all of Dia, announced March 2, was punished by the market. Investors are questioning the merits of an operation intended by the principal shareholders and the flexibilities available to the group to complete its turnaround plan.

The title deals with Carrefour to 31.7 euros on Wednesday at the Paris Stock Exchange, registering an increase of 2.4% since the beginning of the year for a market capitalization of 21.5 billion euros. Since the announcement of the proposed split, the stock has dropped 9.6%.