Bernard Arnault sells out of Carrefour after 14 years

Bernard Arnault updates

French luxury billionaire Bernard Arnault has sold off his remaining shares in food retailer Carrefour, ending a disappointing 14-year investment after a takeover attempt was thwarted earlier this year.

Arnault’s holding company Financière Agache on Wednesday sold its 5.7 per cent stake in Carrefour for €16 per share, raising proceeds of €724m, according to investment bank Société Générale, which ran the process.

The Carrefour investment has been a rare mis-step for the tycoon who controls LVMH and built his empire via acquisitions to become one of the richest people in the world. Arnault made a loss on Carrefour: the shares were trading close to €47 when he bought in 2007, although he would have been paid dividends during the period.

Carrefour shares closed 5 per cent lower on Wednesday, making it the biggest loser on the blue-chip CAC 40 index, which was up 1 per cent.

Under the leadership of chief executive Alexandre Bompard since 2017, Carrefour has been restructuring and selling off assets such as its China business. It is France’s largest grocery chain, with about 2,000 supermarkets and more than 700 large-format hypermarkets in Europe.

Bompard’s cost-cutting drive in recent years has freed up cash to make significant investments in ecommerce, which has boomed during the Covid-19 pandemic.

The company was approached in January by Canada’s Couche-Tard, which operates convenience stores and petrol stations, about a takeover that would have valued it at about €20 per share. But the French government blocked the talks, saying that Carrefour was a strategic business important to the country’s food supply and agricultural base.

Arnault’s exit will leave two other major shareholders at Carrefour, who also hold seats on the 13-member board. The Moulins family, who own department store group Galeries Lafayette, have owned a roughly 10 per cent stake since 2014, while Brazilian billionaire Abilio Diniz owns about 8 per cent, according to Refinitiv data.

One person familiar with the matter said that Arnault’s exit was down to his frustration with the slow pace of the turnround at Carrefour. But in a statement on Wednesday, Arnault commended the CEO’s record. “In the past four years, Carrefour has achieved a remarkable recovery under Alexandre Bompard,” said Arnault. “After 14 years as a long-term shareholder, we have simply decided to reorient our investments.”

Arnault’s Financière Agache has holdings in fashion and luxury, invests in tech start-ups, and also took a stake in sandal maker Birkenstock in February.

The Carrefour exit has had a knock-on effect on the shares of another company in which Arnault has invested, the French media and retail group Lagardère. Its shares fell 7 per cent after a report from BFM TV that Arnault was also thinking of selling out of Lagardère.

He had bought a roughly 25 per cent stake in the limited partnership structure last year in a move seen as a bailout of heir Arnaud Lagardère, who was under pressure from corporate raider Vincent Bolloré and activist investor Amber Capital.

A spokesman for Arnault declined to comment on Lagardère.

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