BRASILIA: Atacadao SA’s investors approved an acquisition by parent company Carrefour SA in a contentious vote that included opposition from some investors and one prominent proxy adviser.
The Brazilian retailer announced that the proposal was approved, without detailing the vote count. Atacadao generated roughly 116 million reais (about US$20mil) in sales last year.
The impetus for Carrefour to acquire Atacadao came late last year. That’s when the company was reported to be in the early stages of studying ways to boost its valuation, after Canada’s Alimentation Couche-Tard Inc abandoned merger talks with the company in 2021.
Carrefour’s offer for Atacadao in February came at a time when the Brazilian stock traded near all-time lows. The shares have rallied on the potential deal. Last Friday post-voting, the stock was little changed at 8.65 reais at 4pm in Sao Paulo.
Trying to buy the company at a depressed stock price proved to be a sticking point for some investors. In early April, the French grocer increased its buyout offer about 10% to 8.50 reais a share for Atacadao.
Initially, both Glass Lewis and ISS advised shareholders to vote against the proposal.
While Glass Lewis maintained its stance, ISS flipped to telling shareholders to back a revised offer that provides a “minimally acceptable exit opportunity”.
Glass Lewis said the revised terms didn’t make the case, especially with the stock price depressed. The offer still doesn’t “clearly represent a compelling outcome for minority investors,” the firm said.
Some shareholders also voiced opposition. The raised offer was “inadequate and a result of a transaction process that was unfair to the interests of minority shareholders,” British Columbia Investment Management Corp said in a media statement. — Bloomberg
