Colombia’s largest retailer launches stock sale to fund expansion in Uruguay

Tuesday, September 6th 2011 - 06:24 UTC

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Disco and Devoto in Uruguay have a dominating percentage of retailing in Uruguay.

Colombia's largest retailer Almacenes Exito SA launched a 2.5 trillion peso (1.4 billion dollars) stock sale for local and foreign investors Monday, the proceeds of which will be used to expand into Uruguay and elsewhere.

Exito (EXITO.BO), which is controlled by French retail giant Casino Guichard-Perrachon SA (CO.FR), said in a statement it launched the sale, which ends Sept. 23, after receiving regulatory approval late last week.

As previously announced, it will sell the shares at Colombian pesos 21,900. This provides investors a 5% discount from Friday's closing level of 23,000 for the Exito stock, which already trades on the Bogotá exchange.

The sale is open to current shareholders, international institutions and common investors. The allocation methodology gives priority to current shareholders, although analysts at Colombian brokerage InterBolsa said it also allows ample space for foreign investors to participate.

Exito announced in June its plan to purchase two retail chains in Uruguay for 746 million dollars, which belong to Casino. Exito plans to buy Casino's 96.5% stake in Uruguayan retailer Devoto and 62.5% share in another chain called Disco. Together, the two retailers have 53 stores and are projected to generate sales of 770 million dollars this year.

In addition to using the stock sale for the Uruguay purchases, Exito said in the statement it will also allow for “the acceleration of our growth plan both locally and internationally”. Exito commands 42% of the formal retail market in Colombia.