On Casino's simplification of its LatAm holdings

All,

The proposed structure change in Casino’s LATAM holding companies would be net net a positive for Casino.

Effectively, Casino are swapping their 55% stake in Exito for Exito’s 50% stake in Segisor/GPA and GPA uses their freshly raised cash from the sale of Via Varejo to buy out Exito’s minority shareholders. This process is unlikely to raise additional cash for Casino at the moment but accompanied by a move of GPA’s shares to a more the New Market raises the liquidity and simplifies their LATAM holdings.

The only significant cash transaction is likely to be GPA’s buy-out of Exito’s 45% minority shareholders. As for Casino’s 55% stake in Exito, this would likely be handled by a swap for Exito’s 50% stake in Segisor (roughly the same value).

Post the transaction, and assuming there is a full take up of the cash offer to Exito’s minority shareholders, Casino will own 41.4% of GPA shares - up from a net 33% now. We are assuming that the Segisor debt remains outstanding (despite potentially a change of control) and secured on Casino’s shareholding in GPA.

As part of the transaction, GPA will unify their common and preferred shares, which would amount to Casino losing control of GPA. But Casino will probably retain effective control of the Company with their 41% shareholding. Whether or not that will result in Casino reconsolidating their entire LATAM business in the future is a question we have posed to the company and will revert on.

Tomas has all the intel.

Wolfgang