Éxito’s Main Shareholder Unveils Huge Stock-Spinoff Plan to U.S., Brazil, Colombia Investors

Medellin-based multinational supermarket and dry-goods retailer Éxito and its principal Brazilian shareholder GPA simultaneously announced September 5 that GPA soon will offer 83% of its shares in Éxito to more than 50,000 current GPA shareholders.

The deal ultimately means that tens of thousands of investors in the U.S., Brazil and Colombia collectively would become Éxito’s biggest shareholders – that is, holding 53% of the total — during the first half of 2023, according to the companies.

“The transaction is expected to consist of the segregation of GPA and Éxito through a capital reduction of GPA with the objective of distributing approximately 83% of the shares of Éxito currently held by GPA to its shareholders,” according to the companies.

“Therefore, following the closing of the transaction, GPA would retain a minority stake of approximately 13% in Éxito, with a potential for monetization in the future,” while France-based Groupe Casino would continue holding a 34% share via its GPA shareholdings, according to the companies.

“As a result of this project, the company’s shareholding base would be substantially expanded, in such a way that the floating capital tradable on the stock markets would increase from 3% to 53%, approximately,” according to a separate Exito press release.

“Casino and GPA (Grupo Pão de Açúcar), would jointly maintain a shareholding of approximately 47%.

“Grupo Éxito will continue to strengthen its investment in Colombia and will continue executing its strategy of omnichannel, commercial expansion and innovation, and traffic monetization, fulfilling its higher purpose of nurturing ppportunities in Colombia,” the company added.

“The transaction will take place through the pro rata delivery to GPA’s shareholders of Éxito common shares — including in the form of Level II Brazilian Depositary Receipts (“BDRs”) or Level 2 American Depositary Receipts (“ADRs”) — both representing Éxito’s common shares, in the manner to be disclosed to the market in due course,” according to GPA.

“GPA’s Board of Directors considers that the transaction, which has the objective of enhancing the market value of the shares of GPA and Éxito separately, has the potential to unlock the value to be captured equally by all GPA’s shareholders.

“GPA’s securities will continue to trade in Brazil on the B3 S.A.– Brasil, Bolsa, Balcão (“B3” exchange) and in the United States on the New York Stock Exchange (“NYSE”).

“Éxito’s securities will continue to trade in Colombia, and Éxito will file the necessary documentation with the CVM [Comisión de Valores Mobiliarios of Brazil] and the U.S. Securities and Exchange Commission to in order to have the BDRs and ADRs listed for trading in Brazil and the United States, respectively, in accordance with high levels of corporate governance and regulation applicable in each of the markets,” according to the announcements.