WSJ: Carrefour Wins Ruling On Evidence Taken In Casino Dispute

     By Max Colchester     Of THE WALL STREET JOURNAL   

PARIS (Dow Jones)--A French court said Friday that evidence seized at Carrefour SA's (CA.FR) headquarters as a part of an ongoing legal dispute between the French retailer and its rival Groupe Casino (CBD, PCAR4.BR) must be sealed pending further court rulings.

Casino had successfully petitioned a court earlier this month to authorize bailiffs to seize documents at Carrefour's offices as part of Casino's feud with the chairman of its Brazilian retail partner over a potential tie-up with Carrefour.

The court ruling Friday, reviewed by The Wall Street Journal, shows Carrefour subsequently filed for the documents to be returned. In the ruling, Judge Patrick Lepeytre said 22 documents seized at Carrefour's offices should be kept under seal until a judge requests them. The remaining documents must be returned to Carrefour, the judge said.

"We are satisfied with the decision, which supports Casino's attempt to ensure its rights are respected in France and Brazil," Casino said in a statement. A spokesman for Carrefour declined to comment.

Earlier this month, Casino requested international arbitration with Companhia Brasileira de Distribuicao chairman Abilio Diniz over a shareholder pact that covers their joint control of Brazil's largest retailer.

Casino and Diniz have jointly controlled CBD for several years, and Casino could take control of the retailer next year under the agreement. Yet, for the past several weeks, Diniz, whose family runs the Pao de Acucar chain of supermarkets, has been in talks with Carrefour over several potential tie-up options, including a stock-for-stock exchange, according to people familiar with the matter.

Casino first invested in the Brazilian retailer in 1999 and its Brazilian business has become a cornerstone of its global aspirations. It now owns 35% of the company.

The court documents show that Casino filed its request on May 27 and the bailiffs visited Carrefour's premises on June 1 and searched the computers of certain Carrefour managers. They went back on June 6 but were unable to secure further documents. On June 10, Carrefour requested the documents be returned.

A tie-up with CBD could fortify Carrefour's position in Brazil as it struggles to right its business at home in France. Pao de Acucar has more than 1,300 stores, from neighborhood shops to supercenters, while Carrefour has 500 stores.

In recent years, Carrefour has examined numerous options to restructure, including selling its Brazilian and Chinese operations, but it has decided to hold on to them. Carrefour said Friday it was strengthening its presence in the Chinese market with the acquisition of minority stakes in three mainland China retailers it already controls.

China and Brazil generate much of Carrefour's growth and help offset sluggish growth in its home market in France.

Carrefour has faced setbacks in Brazil. It incurred 550 million euros in charges last year related to years of mismanagement of its hypermarket stores.

--David Gauthier-Villars and Christina Passariello contributed to this article.

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