Credit: Now it is personal: Brazilian retail baron Abilio Diniz is so irritated with efforts to spoil a merger between his baby CBD and French colossus Carrefour that he might fund the deal himself. CBD ( CBD , quote ) is the biggest retail chain in Brazil, built up over the years by the Diniz family. He still serves as chairman. Once an institutional shareholder -- a unit of leading Latin investment bank Pactual -- suggested that CBD merge with the Brazilian operations of Carrefour ( CRRFY , quote ), Diniz was eager to explore the opportunity. So were traders, who pushed CBD all the way from $41 to $54 during the next few days: However, one-time ally Casino Guichard (thinly traded as CGUIY , quote ,) which bought a 37% stake in CBD a few years back, balked at the idea of its subsidiary selling itself to archrival Carrefour. Casino has muttered about going to court to fight the deal and has gotten Brazilian state lender BNDES to pull plans to pour $2.4 billion into the merged entity. Left with that gap, Diniz says he will provide the funding himself if he needs to do it. His personal fortune is estimated at around $2 billion. Pactual could probably provide attractive enough financing terms. Is this bluster or a vendetta? All traders need to know is that practically all the deal premium has now been priced back out of CBD shares, so any upside is back on the table now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
