By Luciana Magalhaes
SAO PAULO--French Casino Guichard-Perrachon (CGUSY, CO.FR) is
likely to intensify pressure on Brazilian businessman Abilio Diniz
to resign as chairman of Brazil's largest retail group, Grupo Pao
de Acucar, or GPA, after shareholders of Brazil's giant food
company BRF-Brazil Foods S.A. (BRFS3.BR) vote Tuesday on Mr.
Diniz's nomination for chairman of BRF.
Casino said in a written response to a question from Dow Jones
Newswires that the company can't anticipate what will happen if Mr.
Diniz is elected chairman of BRF, but that it expects him to resign
from his position at GPA to avoid conflicts of interest.
Casino asked for Mr. Diniz's resignation in February following
rumors of his talks with BRF. The goal was to avoid a conflict of
interest should he join the board of another company. Mr. Diniz
purchased around 1 billion Brazilian reais ($500 million) in BRF
shares in January and in late February he was nominated to be BRF's
chairman for the 2013-2015 period.
According to people close to Casino's top management, the group
sees a potential conflict of interest if Mr. Diniz holds both
positions, because BRF and GPA have a strong commercial
relationship.
Created by a 2009 merger between Sadia SA and Perdigao SA, BRF
operates in the segments of poultry, pork and beef, industrialized
meats and margarine, among others. It had 61 plants in Brazil at
the end of 2012 and others in other countries, serving a total of
140 markets.
"BRF is a major supplier of GPA and this could lead to problems
in the future," one of the people said, adding that some of GPA's
other suppliers could feel the relation of the two companies would
harm them.
Mr. Diniz stated in February that neither of the two companies,
BRF or GPA, had any power to influence the behavior of the
other.
Another person with knowledge of the situation said Casino won't
"remain passive" if Mr. Diniz is elected, but didn't say what
Casino's next move would be if he didn't resign.
Mr. Diniz declined to comment for this article.
Mr. Diniz and Casino owner Jean-Charles Naouri have had open
conflicts in recent years after Mr. Diniz attempted to back out of
a 2005 deal to hand over the control of GPA, founded by his family.
Casino took control of Grupo Pao de Acucar earlier this year, as
agreed, after Mr. Diniz attempted in 2011 to merge GPA with the
Brazilian unit of Casino's rival in France, Carrefour SA (CRRFY,
CA.FR).
Write to Luciana Magalhaes at luciana.magalhaes@dowjones.com
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