Colony Capital has teamed up with French investment firm Groupe Arnault to buy a 9 percent stake in Carrefour, one of the world’s largest supermarket chains, valued at approximately €4 billion ($5.2 billion).
The pair’s purchase of 9.8 percent, or 64 million shares, has sparked speculation that they plan a shake up of the company by forcing real estate disposals.
Colony pursued a similar strategy when it invested €1 billion in French hotel group Accor in 2005. Since then, the company has disposed of a significant amount of real estate. Just this week, Accor announced the sale of 91 hotels in the Germany and Netherlands for €868 million to London property investment group Moor Park. Since Colony made its investment in Accor, the company’s shares have risen from lows of €29 per share to €67 per share.
Several stock analysts have reportedly indicated that while Colony may be attracted by Carrefour’s real estate portfolio, a bid for the entire company seems unlikely. Carrefour currently operates or franchises 12,000 stores in 29 countries.
Colony and Groupe Arnault, which is controlled by French billionaire Bernard Arnault, issued a joint statement in the wake of their acquisition. “This is a long-term strategic and industrial investment,” the statement read. “Colony Capital and Groupe Arnault consider that Carrefour, a world leader in its sector, has strong growth potential.”
News of the purchase emerged on the same day that Carrefour chairman Luc Vandevelde resigned from the company. He has been replaced by Robert Hall, whose family is the largest shareholder in Carrefour. The company said the resignation was “guided by the interest of Carrefour, its shareholders and its collaborators.”
Colony’s acquisition in Carrefour comes as a private equity consortium eyes Britain’s Sainsbury’s supermarket, which has real estate assets last valued in March 2006 at €11 billion. The UK takeover panel has ruled that CVC and its partners must bid by Friday April 13 or lose the right to make a bid for another six months.