UPDATE 1-Brazil's Via Varejo soars on reports of Falabella, Steinhoff interests

  • Reuters
  • Stock Market News
UPDATE 1-Brazil's Via Varejo soars on reports of Falabella, Steinhoff interests
Credit: © Reuters.

(Adds share performance, companies declining to comment)

SAO PAULO, Nov 24 (Reuters) - Shares in Brazil appliance retailer Via Varejo SA soared on Thursday by the most since March on reports that three suitors have expressed interest in a controlling stake in the company.

SACI Falabella SA FAL.SN , Steinhoff International Holdings Ltd SHFFp.J and Lojas Americanas SA LAME4.SA are among a group of retailers interested in Via Varejo VVAR3.SA , newspaper Valor Econômico reported.

Citing people with knowledge of the situation, Valor said GPA SA PCAR4.SA , Via Varejo's controlling shareholder, had received a list of potential interested parties from Banco Santander (MC: SAN ) Brasil SA, its adviser in the deal.

Late on Wednesday, GPA's board authorized management to start proceedings to sell the 43.3 percent controlling stake it has in Via Varejo.

Via Varejo units VVAR11.SA , a blend of common and preferred shares, rose as much as 13.2 percent to 9.35 reais, extending gains to 182 percent so far this year. Preferred shares in GPA PCAR4.SA rose 3 percent, their third straight daily gain.

Executives and representatives for Santiago-based Falabella and Johannesburg-based Steinhoff did not immediately comment. Rio de Janeiro-based Lojas Americanas and Via Varejo declined to comment.

GPA, Brazil's largest diversified retailer, wants to exit Via Varejo to focus on food retailing. The company, which owns supermarkets under the Pão de Açúcar brand, posted a larger-than-expected third-quarter loss, due in part to a sharp drop in non-food sales at the group.

Brazil's appliance retailing segment has struggled over the past two years with the impact of a recession not seen in eight decades and a credit crunch, which worsened as unemployment and interest rates climbed. Casino Guichard Perrichon SA, which in turn controls GPA, hired Santander Brasil SANB11.SA to advise on the Via Varejo deal. The Klein family, holder of a 27.3 percent stake, has hired the investment banking unit of Banco Bradesco SA BBDC4.SA as adviser.

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